New Zealand shares fell from a record high as speculation about a Federal Reserve rate hike next month drove up the US dollar and prompted some offshore funds to trim their investments. Auckland International Airport, Meridian Energy, and Genesis Energy led a late selloff.
The NZX 50 fell 79 points,or 1.1 per cent, to 6903.63. Within the index, 33 stocks fell, 12 rose and five were unchanged. Turnover was $215 million.
If rates are going higher then maybe the US dollar is going to be stronger.
Stock markets were broadly weaker across Asia after the minutes of the last Federal Open Market Committee meeting showed an interest rate hike in the US next month was possible, provided economic data plays out as expected. In the local market, offshore investors sold companies typically held for their relatively attractive dividend yield, local market participants said.
"If rates are going higher then maybe the US dollar is going to be stronger and typically offshore funds would sell assets and bring the money back home," said James Lindsay, senior portfolio manager at Nikko Asset Management. There was "very heavy offshore selling" in the 30 minutes before the market closed, he said.
Auckland Airport dropped 4.2 per cent to $6.37 while Meridian fell 3.8 per cent to $2.685 and Genesis declined 3.3 per cent to $2.05.
A2 Milk fell 6.4 per cent to $1.61, leading the index lower, which Lindsay said mirrored a sharp drop in shares of Australian companies which had enjoyed a similar rally on their prospects in China, including vitamin maker Blackmores. BusinessDesk
