The NZ market has trailed events on Wall Street all week. Photo: AFP / Getty Images / Michael M Santiago
The New Zealand stock market has been buffeted by the slide in US markets, amid continued nervousness about overvalued AI companies and a possible breaking of a bubble.
The NZX has gyrated through the week, as it trailed events on Wall St, and at one stage on Friday was down more than 180 points or about 1.4 percent, before trimming its losses to about 0.5 percent early afternoon.
The previous session, the NZX had gained close to one percent and only a week ago it set a record high.
"The NZX was caught by this downdraft led by the US," Forsyth Barr investment advisor Brad Gordon said. "It's been a really strong reversal overnight, with the Dow Jones moving in a thousand point range."
Local analysts have said the New Zealand market, while not closely connected to US markets nor with any real presence of technology stocks, cannot escape global market volatility on such a scale.
The Australian market, which is dominated by financial and mining stocks, was down more than 1.3 percent, touching a five-month low.
Earlier, other stock markets around the world were mixed, as a rally lost momentum, after US jobs data clouded hopes of further interest rate cuts and fears of an AI bubble persisted.
Europe's main equity indices closed higher but Wall Street slumped following a strong open. Asia's leading stock markets were mixed.
Investors cheered an earnings report released late Wednesday by AI bellwether Nvidia, which topped expectations on fierce demand for its advanced chips.
Chief executive Jensen Huang brushed off fears of an artificial intelligence bubble that has caused global equities to wobble.
Jim Reid, managing director at Deutsche Bank, said Nvidia's results had temporarily stalled some fears.
But Adam Sarhan of 50 Park Investments warned: "When you have valuations that are this high, they're not sustainable."
Shares in the chip giant - which last month hit a US$5 trillion (NZ$9t) valuation - slipped after rallying at the start of Wall Street trading Thursday. They closed 3.2 percent down.
The upbeat earnings were offset by data showing the US jobless rate crept higher in September, even as hiring exceeded analyst expectations.
"This report is unlikely to massively shift the needle for the December Fed meeting which looks like a pause," said Joshua Mahony, chief market analyst at traders Scope Markets. He was referring to the Federal Reserve's next interest rate decision due in December.
The dollar traded mixed against its main rivals following the update.
Thursday's jobs publication marked the first official snapshot of the labor market's health in more than two months, owing to a 43-day US government shutdown that ended last week.
The report is set to deepen divisions within the Fed, with underlying job market weakness adding to the case for another rate cut - but solid hiring potentially encouraging some officials to hold off for longer.
Oil prices ticked down, and a US Treasury official told reporters that Chinese and Indian refineries and banks were moving to comply with recently announced US sanctions on Russia's two biggest oil producers - Lukoil and Rosneft.
China and India are key buyers of Russian oil, and the sanctions were aimed at cutting off revenues fueling war in Ukraine.
The US official, speaking on condition of anonymity, said many such institutions are conscious of these sanctions and risk averse, while recognising the importance of relationships with the West.
- AFP/RNZ
