Rearing US inflation drives global stock markets lower
The S&P/NZX 50 Index dropped 137.79 points, or 1.1%, to 12,428.12. Of the 186 stocks on the main board, 102 fell and 29 rose. Turnover was $162.4 million.
US inflation was unexpectedly strong, with consumer prices rising the most in nearly 12 years in April as resurgent demand clashed with global supply constraints. Stocks across Asia followed Wall Street’s lead as the relative attraction of equities dwindled on the prospect of rising interest rates.
Greg Smith, head of research at Fat Prophets, said that weakness washed through the local market, although he doesn’t expect interest rates to shoot up any time soon.
“The prospect of higher interest rates raises the bar for a lot of growth stocks,” Smith said.
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