NZ shares end flat as US inflation pushes bond yields higher – Market close

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David Jones’ receivers announced that 19 of the 38 stores in Australia and New Zealand will close by the year's end, including the one in Westfield Newmarket, Auckland. Photo / NZ…

David Jones’ receivers announced that 19 of the 38 stores in Australia and New Zealand will close by the year's end, including the one in Westfield Newmarket, Auckland. Photo / NZ Herald

The New Zealand sharemarket was flat on continuing cautious trading as inflation reared its head in the United States and bond yields moved back up.

The S&P/NZX 50 Index recovered from a midday dip to 14,063.65 and traded steadily to close at 14,179.86, up 12.45 points or 0.09%.

There were 79 gainers and 62 decliners on the main board, and turnover reached 28.6 million shares worth $99.3 million. It was the third day in a row where volumes were under $100m.

In the US, the October consumer price index (CPI) increased 0.4%, above the expected 0.3%, and excluding volatile food and energy costs, the index was up 0.2% against an expected 0.2%.

Jeremy Sullivan, investment adviser with Craigs Investment Partners, said the CPI pushed Treasury yields higher and reinforced expectations that the Federal Reserve will need to keep policy tight.

“For equity investors, it’s another reminder that the interest-rate headwind hasn’t disappeared, particularly for higher-valuation growth stocks,” he said.

The US 10 Year Treasury Note yield went above 5% but settled at 4.99%. Fed governor Christopher Waller said a December rate hike is likely, opening the door to a possible 50-basis-point increase amid persistent inflation.

On Wall Street, the Dow Jones Industrial Average was down 0.3% to 52,231.89 points; the S&P 500 decreased 0.38% to 7,520.93; and the Nasdaq Composite declined 0.74% to 25,065.88.

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