Source: Radio New Zealand
The benchmark NZX50 fell 1 percent in early trading, or 145 points. RNZ / Angus Dreaver
The New Zealand share market has opened sharply lower following the latest conflict in the Middle East.
The benchmark NZX50 opened down 1 percent, before extending its losses to be down 1.3 percent mid-morning.
Market heavyweights Auckland Airport, Fisher & Paykel Healthcare, and Infratil led the market down.
The New Zealand dollar, along with the Australian dollar, was also weaker as investors looked to reduce their global risk exposure.
The Kiwi fell 0.8 percent to be 59.5 cents against the United States dollar, while the Australian dollar fell more than 1 percent against the US dollar in early trade.
Investors tend to sell riskier assets during times of geopolitical volatility, with money diverted to safe haven investments like bonds.
Oil prices are also expected to rise when international trading resumes.
In an early morning note, BNZ senior interest rate strategist Stuart Ritson said financial markets began the week “facing heightened uncertainty”.
“The scale of the attacks, and Iran’s response, has exceeded expectations, pointing to further demand for safe-haven assets and upward pressure on oil prices,” he said.
“With President Trump calling for regime change and signalling the risk of a protracted conflict, the range of potential outcomes has widened, and will likely weigh on risk-sensitive assets.”
Oil prices had already moved higher prior to the attacks, Ritson said.
Brent crude – the global benchmark for oil – closed more than 2 percent higher at US$72.50 per barrel ahead of the attacks, and prices were expected to rise sharply.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
