Higher bond yields push equity prices lower

The S&P/NZX 50 Index dropped 99.1 points, or 0.7 percent, to 12,992.14. Within the index, 28 stocks fell, 15 rose and seven were unchanged. Turnover was $152 million.

NZ government bond yields and swap rates took another step higher today, with the 2-year swap rate now at 0.35 percent and the 10-year swap rate at 1.42 percent — up almost 16 basis points from Wednesday.

Yesterday’s surprisingly strong employment data triggered the most recent move, as it looks more likely the Reserve Bank of New Zealand could tighten monetary policy.

BNZ senior market strategist Jason Wong said the strong economic data had set the scene for “an interesting policy update” from the RBNZ on Feb. 24.