Asia-Pacific shares grappled for direction on Wednesday’s trading session as the Reserve Bank of New Zealand launched its biggest rate hike in 22 years.
The RBNZ announced its decision to raise the official cash rate by 50 basis points to 1.50%. The move also represented the fourth consecutive increase of the central bank.
Accordingly, the Kiwi Committee agreed it would be appropriate to continue to tighten monetary conditions. The aggressive move aims to maintain price stability and support maximum sustainable employment.
Following the decision, the S&P/NZX 50 index lost 0.37% or 43.60 points to the 11,845.57 mark.
At the bottom of the benchmark, electricity retailing company Trustpower plunged 5.61% or 0.28 points to $4.72 per share.
Then, Eroad, a tracking systems provider, edged down 4.72% or 0.10 points to $2.07 per share. Similarly, donor management system Pushpay lost 2.75% or 0.02 points to $0.72 per share.
Meanwhile, in Australia, the S&P/ASX 200 index added 0.21% or 15.80 points to the 7,469.80 mark.
Investors of Asia-Pacific shares continued weighing the risks of high inflation. US consumer prices elevated 8.50% in March compared with a year ago, the fastest annual gain since 1981.
The figure surpassed the average market estimate of 8.40%. It also strengthened from the February record rate of 7.90%.
Eventually, the core CPI, which excludes food and energy, showed signs of dwindling. It climbed 6.50% year-over-year but lower than the forecasted 6.60%. Nevertheless, it still jumped from the previous 6.40%.
Moreover, this inflation report validates the anticipated 50 basis point rate hike by the Federal Reserve in May. Experts also warned that cost pressures would remain a significant risk.
China traded negatively in Asia-Pacific shares
Chinese stocks are also in a negative trading position compared with other Asia-Pacific shares. The damp movement came as concerns around the mainland’s COVID situation continue to weigh sentiment.
Subsequently, local authorities imposed harsh stay-home measures and travel restrictions to control the outbreaks.
The Shanghai Composite index pared 0.34% or 11.08 points to the 3,202.25 mark. Then, the benchmark Shenzhen Component declined 0.77% or 90.33 points to the 11,666.05 mark.
Inversely, Hong Kong’s Hang Seng index strengthened 0.37% or 78.66 points to the 21,397.79 mark.
Furthermore, Japanese stocks gave additional gains to the Asia-Pacific shares. The Nikkei 225 index rose 1.51% or 397.72 points to the 26,732.70 mark. Likewise, the TOPIX increased 0.98% or 18.22 points to the 1,881.85 mark.
Overall, the MSCI’s broadest index of Asia-Pacific outside Japan upturned 0.82% or 4.79 points to the 578.61 mark.
