Rising bond yields pull shares lower

The S&P/NZX 50 Index fell 84.97 points, or 0.7%, to 12,548.63. Within the index, 27 stocks fell, 14 rose, and nine were unchanged. Turnover was $203.7 million.

“Global equity markets’ barnstorming run hit a small speedbump overnight, contributing to a slightly more cautious tone across broader financial markets,” Mike Jones, an ASB Bank economist said.

Equity investors have become cautious about high asset prices given the possibility bond yields will continue to rise as policymakers make a deliberate attempt to reflate their economies with fiscal stimulus.

“High yielding stocks aren’t going to go completely out of fashion any time soon but there may be some trepidation there,” said Greg Smith, head of research at Fat Prophets.