Business

NZX 50 index closes down 1.8 percent

17:43 pm on 14 February 2022

The local sharemarket's slide continues with investors fretting about rising interest rates.

NZX sign Photo: RNZ / Angus Dreaver

The benchmark NZX 50 index has closed down 224 points or 1.8 percent, on the back of Friday's hefty fall to hover just above a 13 month low.

Leading stocks Fisher and Paykel Healthcare, Ebos, and Sky City were among the bigger falls, but retirement village operators were also weak.

The New Zealand market has fallen nearly 9 percent so far this year.

Director of investment firm Hobson Wealth Brad Gordon said the prospect of rapidly rising interest rates was unnerving investors.

"It's interest rates, fears that the Reserve Bank may move by 50 basis points (half a percentage point) when it meets, that's probably the biggest overhang for the market."

The RBNZ has its first monetary policy statement next week and is expected to lift its Official Cash Rate by 25 basis points to 1 percent, to tackle surging inflation, which hit a 31 year high of 5.9 percent for the year ended December.

Official data from Stats NZ showed food prices, which make about a fifth of the consumer price index, rose 2.7 percent in January on the month before driven by sharply higher fresh fruit and vegetable prices.

It was the single biggest monthly rise in prices in five years and took the annual food inflation rate to 5.9 percent.

The spike in food prices led BNZ economists to increase their pick for annual inflation to hit 6.6 percent in the three months ended March.