Rising bond yields push shares down

ASB economist Chris Tennent-Brown said bond yields both in NZ and overseas were climbing after the US Federal Reserve and the Bank of England took a “more hawkish” tone at meetings last week.

“Higher inflation expectations and major central banks shifting towards a reduction in monetary policy accommodation are supporting the broad upswing in government bond yields,” he said.

The yield on a 10-year NZ government bond was sitting just below 2% today, near the highest level seen this year. This higher rate is putting downward pressure on some stocks.

Benchmark equity index, the S&P/NZX 50 fell 31 points, or 0.2%, to 13,227.7 on Monday with $150 million traded through the market.