Asia worst­hit in mar­ket slump

Otago Daily Times - - BUSINESS & MONEY - SI­MON HART­LEY si­mon.hart­ley@odt.co.nz

TUR­MOIL con­tin­ued across the world’s share­mar­kets yes­ter­day. Asia was worst hit, while losses across the ma­jor US in­dexes eased but re­mained in neg­a­tive ter­ri­tory.

The NZX50 in­dex, which closed down 3.64% on Thurs­day, closed yes­ter­day’s trad­ing up 1.4%, while the ASX200 fin­ished up 0.2%.

United States sen­ti­ment is be­ing driven by higher US Trea­sury bond in­ter­est rates, as in­vestors opt to move cash there, com­pounded by the USChina trade ten­sions and con­cern the years­long bull mar­ket is due for a cor­rec­tion.

In yes­ter­day’s US trad­ing, the Dow Jones In­dus­trial Av­er­age fell 2.13%, the S&P 500 lost 2.06% and the Nas­daq Com­pos­ite dropped 1.25%.

Craigs In­vest­ment part­ners bro­ker Peter McIn­tyre said share­mar­kets across the Asi­aPa­cific re­gion ex­pe­ri­enced sig­nif­i­cant falls on Thurs­day, the ‘‘worst’’ day of the week.

China’s Shang­hai Com­pos­ite In­dex slid 5.2%, the Hang Seng in Hong Kong was off 3.54%, Tai­wan’s tech heavy Taiex lost 6.31%, the Korean KOSPI closed 4.44% lower and Ja­pan’s Nikkei closed down 3.89%.

He said more volatil­ity was in store, but in­vestors were re­al­is­ing good buy­ing op­por­tu­ni­ties were emerg­ing.

New Zealand in­vestor sen­ti­ment, in­clud­ing some of the large in­sti­tu­tional in­vestors, was be­ing driven by tak­ing gains, given the ‘‘stel­lar run’’ of the NZX50 dur­ing the past year.

The NZX50 and US S&P500 were the top per­form­ing in­dex for the past year.

Mr McIn­tyre noted a2 Milk shares dropped 11.46% and Auck­land In­ter­na­tional Air­port was down 4.75%; re­spec­tively they rep­re­sented 6.22% and 6.8% of the mar­ket.

Also driv­ing the sell­off was New Zealand con­cern ris­ing US in­ter­est rates would ul­ti­mately send lend­ing costs higher in New Zealand higher.

Mr McIn­tyre said while the NZX50 was down 6.74% for the month, it was still in pos­i­tive ter­ri­tory for the year to date, up 3.85%.

Forsyth Barr bro­ker Suzanne Kin­naird said Asian mar­kets ‘‘plum­meted’’ fol­low­ing the losses in the US, while the ASX 200 fell to its low­est close since mid­April.

‘‘Euro­pean and UK eq­ui­ties tum­bled as the Wall Street sell­off damp­ened in­vestor sen­ti­ment.

‘‘A gen­eral con­cern the bull mar­ket might be due a cor­rec­tion ap­peared to be be­hind the [US] rout,’’ she said.

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