NZX50 dodges worst of market ructions over Iran conflict fears

New Zealand’s S&P/NZX 50 index dodged the worst of the rout across Asia as investors remained uneasy about US President Donald Trump’s military campaign against Iran, which has seen oil prices jump to near two-year highs and bonds sold off as traders fear an inflation revival will see the Federal Reserve pause its predicted rate hikes.

Infratil was the biggest drag on the local market, with a raft of blue chip names on the red side of the ledger, including Auckland International Airport, Fletcher Building and a2 Milk Co, while Serko posted the steepest decline on the day.

The kiwi dollar clawed back some of its losses against the greenback after Statistics New Zealand figures showed the country’s terms of trade improved more than expected in the December quarter, as rising export prices boosted the purchasing power of those foreign sales, and as milk prices rose at the Global Dairy Trade auction, while stronger economic growth than expected across the Tasman added further conviction that the Reserve Bank of Australia will hike its benchmark rate this month.

And Genesis Energy navigated the heightened volatility as its shares remained above the offer price in a discounted rights issue to help fund new generation, and Mercury NZ dipped less than the value of the dividend rights it shed.