Middle East conflict weighs on NZ sharemarket

The S&P/NZX 50 Index followed Wall Street by falling in the morning but recovered in the afternoon to close at 12,451.69, down 15 points or 0.12%.

Greg Smith, head of retail with Devon Funds Management, said there was an air of uncertainty about where the events in the Middle East will lead to. And there was an air of expectation about the Reserve Bank’s official cash rate decision next week.

“It will be a tight call on whether the cut is 25 or 50 basis points. Business outlook has improved but it’s still tough out there. Hiring intention is weak, and inflation has come down quicker than the Reserve Bank thought,” Smith said.

“Dairy prices have gone up again and that’s good news for the farming sector, and there’s more optimism around China which is good for New Zealand. But we’ve yet to see what the Chinese economic stimulus packages will mean for trading partners.”