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Investors are on tenterhooks ahead of key US inflation data due out overnight.
The sharemarket gained, in line with overseas markets, on optimism that the US central bank may hold interest rates steady this week.
The benchmark S&P/NZX 50 Index rose 0.3%, or 37.293 points, to 11,652.84 on Tuesday. On the broader market, 67 stocks rose and 58 fell with $115 million shares traded.
It followed a rise on Wall Street which vaulted the S&P 500 to its highest level in more than a year. The benchmark index rose 0.9% to 4338.93, its highest close since April 2022. The Dow Jones Industrial Average gained 0.6%, while the Nasdaq composite rallied 1.5%.
“We had a pretty strong lead from offshore,” said Hobson Wealth investment adviser Brad Gordon.
Investors are hoping the Federal Reserve may take it easier on its hikes to interest rates. Traders are betting the Fed will hold rates steady at its upcoming meeting, which concludes on Wednesday US time. That would mark the first time the Fed hasn’t hiked rates at a meeting in more than a year.
Key US inflation data is due out overnight. Economists expect the data to show prices for consumers (CPI) were 4.1% higher in May than a year earlier. That’s way above the Fed’s target of 2% inflation, but it would be down from 4.9% in April and a peak of more than 9% last June.
Gordon said the US inflation data overnight would give the market some direction over the next few weeks.
“Markets are trying to tell you it’s going to be a weakish CPI number – that’s part of the reason why the lead was so strong into it, so we’re a wee bit on tenterhooks,” he said.
Breakfast
The bank’s chief economist Nick Tuffley said inflation remained stubbornly high.
Heavyweight stocks gained, lifting the market.
Fisher & Paykel Healthcare added 1.5% to $23.91, Meridian Energy gained 1.1% to $5.31, Auckland International Airport advanced 1.2% to $8.60, Spark edged up 0.1% to $5.12, Mainfreight lifted 0.8% to $69.78, and Ebos Group rose 1.9% to $36.26.
New Zealand also has key data releases this week, including first-quarter current account data on Wednesday and first-quarter GDP on Thursday, both of which Gordon said could move markets.
He said oil prices had taken another hit over recent days after investment banks, including Citigroup and Goldman Sachs, cut their outlook for prices as slower global growth dents demand and non-OPEC supply ramps up.
Reuters noted there was some bargain hunting on oil markets on Tuesday after the previous day’s plunge.
West Texas Intermediate, the US benchmark, and Brent Crude, the international benchmark, both declined around US$3 a barrel on Monday.
On Tuesday they regained some ground with Brent Crude up 0.7% to US$72.34 a barrel, while West Texas Intermediate added 0.5% to US$67.47 a barrel.
– With AP
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