FX.co ★ NZX 50 Slides After RBNZ Hits Pause on Rate Cuts

The S&P/NZX 50 index experienced a 0.7% decline, closing at 12,769 on Wednesday. This setback comes after reaching its highest point in over seven weeks in the previous session. The drop followed the Reserve Bank of New Zealand's decision to halt its rate-cutting trajectory. As anticipated by many, the RBNZ maintained its cash rate at 3.25%, amid apprehensions over persistent inflation and global trade tensions, both of which could continue to exert upward pressure on prices. This decision comes after six consecutive rate cuts since last August, amounting to a total reduction of 225 basis points. Nevertheless, policymakers suggested that additional cuts could be on the horizon should inflation decrease as predicted in the May forecasts. Within the corporate sector, Citi downgraded a2 Milk from "buy" to "neutral," citing increasing caution due to various datapoints affecting the dairy company's short-term prospects. This downgrade saw a2 Milk's shares tumble 4.1%, reaching their lowest level since early April. Other significant decreases were noted in Meridian Energy (-2.3%), Infratil (-1.5%), Port of Tauranga (-1.3%), and Fletcher Building (-3.5%). The market was further impacted by declines in property stocks.