In New Zealand, the Reserve Bank Survey of Expectations showed one-year-ahead Consumers Price Index inflation would increase from 2.59% to 3.41%, and two-year-ahead inflation from 2.37% to $2.53%.<\/p>\n
Greg Smith, investment specialist with Generate, said inflation had reared its head again.<\/p>\n
\u201cThough the Reserve Bank survey was not as bad as it could have been. We are looking at a short-term inflationary shock, and that will be some relief to the bank.<\/p>\n
\u201cThe market is now pricing in a 40% chance of an official cash rate hike in May, down from 60%,\u201d Smith said.<\/p>\n
On Wall Street, the Dow Jones Industrial Average was up 0.11% to 49,760.65 points; the S&P 500 was down 0.16% to 7400.96; and the Nasdaq Composite decreased 0.71% to 26,088.2.<\/p>\n
Across the Tasman, the S&P\/ASX 200 Index was down 0.46% to 8630.7 points at 6pm NZ time.<\/p>\n
The banks were weaker after the Federal Budget changed the rules on negative gearing and capital gains tax discounts in the property investment market.<\/p>\n
CBA, more heavily into mortgage lending to investors, had fallen 10.36% to A$153.79. On the NZX, ANZ decreased $1.10 or 2.58% to $41.60, and Westpac declined $2.02 or 4.53% to $42.58.<\/p>\n
In a report on New Zealand\u2019s economic outlook, ANZ said the conflict in the Middle East represents a negative national income shock for New Zealand.<\/p>\n
\u201dAs a net importer of petroleum products, our terms of trade are likely to take a hit even if key export prices remain robust (so far, so good for meat and dairy).\u201d<\/p>\n
ANZ has forecast that the Brent crude oil price will be under US$90 a barrel by the end of the year and there will be no fuel rationing. Annual inflation will be 4.4% in the second quarter and 4.1% by the end of the year.<\/p>\n
Economic growth this year will be 1.5% and increase to 2.6% and 2.7% in 2027 and 2028. Unemployment will reach 5.5% in the second quarter and 5.8% in the fourth quarter.<\/p>\n
ANZ expects the Reserve Bank to hike the Official Cash Rate in July, September and October, taking it to 3%. The NZ dollar should strengthen to A85c against the Australian by the end of the year and A87c by the end of next year.<\/p>\n
Spark declined<\/a> 6c or 2.9% to $2.01; Gentrack was down 13c or 3.15% to $4; Auckland International Airport eased 11c to $8.28; and Scales Corp decreased 28c or 4.41% to $6.07.<\/p>\n Other decliners were AFT Pharmaceuticals, falling 25c or 6.58% to $3.55; The Warehouse easing 2c or 3.1% to 62.5c; Michael Hill down 1.5c or 3.41% to 42.5c; and Eroad losing 5.5c or 5.34% to 97.5c.<\/p>\n Port of Tauranga was up 11c to $8.31; Channel Infrastructure gained 6c or 1.92% to9 $3.19; and Fonterra Shareholders\u2019 Fund increased 24c or 3.58% to $6.94.<\/p>\n The energy sector was stronger, with Mercury rising 20c or 2.9% to $7.10; Contact increasing 27c or 2.8% to $9.90; and Vector up 9c or 1.78% to $5.14.<\/p>\n In the property market, Stride increased 4.5c or 4.04% to $1.16; Property for Industry was up 5c or 2.1% to $2.43; and Kiwi was down 2.5c or 2.8% to 94.5c.<\/p>\n Cancer diagnostics company Pacific Edge, down<\/a> 0.006c or 3.45% to 16.8c, has completed a placement for $25.4m at 17c a share. The company is now making a rights offer to raise up to $6m.<\/p>\n Radius Residential Care was up 1.5c or 3.9% to 40c after reporting a 14% increase in full-year revenue to $202.28m and a 34% rise in net profit to $9.5m. It is paying an increased final dividend of 1.2c a share on June 11.<\/p>\n