The New Zealand share market is poised to open lower after Wall Street's sharp decline. Photo / File.
The New Zealand share market is poised to open lower after Wall Street's sharp decline. Photo / File.
New Zealand's sharemarket is expected to open lower after rising world trade tensions drove the US sharemarket to its biggest one day drop so far this year.
The US sharemarket is now down 6 per cent from its record high in July.
US bond yields also fell, sharply, fuelling fears that a recession may be around the corner for the world's biggest economy.
Those sharply lower US bond yields could prove supportive for the local market, given its high level of high-yielding, bond proxy stocks, Matt Goodson, managing director of Salt Funds Management, said.
US stocks had plummeted after China struck back in response to President Donald Trump's threat to levy further tariffs on Chinese goods in the ever-growing trade war, rattling investors and bringing global markets to their knees.
Beijing allowed the yuan to slump to its lowest rate in 11 years, a move Chinese officials characterised as an explicit means of levelling the playing field after Trump ended a short-lived cease-fire in the trade war last week by announcing plans to slap 10 per cent tariffs by September 1 on the remaining US$300 billion in Chinese imports that had not yet hit with levies.
Rising trade tensions between the US and China helped drive the New Zealand market lower on Monday, the S&P/NZX50 dropping by just under 100 points to 10,766.03.
By the US close, the Dow Jones Industrial Average had fallen by 767 points or 2.9 per cent to 25,717.74.
The technology-based Nasdaq Composite index fell by 278 points or 3.5 per cent to 7726.04.
Australian futures market pricing suggested the Australian sharemarket would decline today by 1.5 per cent.
