Summarised by Centrist

New Zealand’s share market, the benchmark NZX50, opened down 1% and extended losses to 1.3% by mid-morning, in its first trading session since the latest escalation in the Middle East.

Auckland Airport, Fisher & Paykel Healthcare and Infratil led declines.

The New Zealand dollar fell 0.8% to 59.5 US cents, while the Australian dollar dropped more than 1%.

During periods of geopolitical volatility, capital typically shifts toward safe-haven investments such as bonds.

BNZ senior interest rate strategist Stuart Ritson said markets began the week “facing heightened uncertainty”.

“The scale of the attacks, and Iran’s response, has exceeded expectations, pointing to further demand for safe-haven assets and upward pressure on oil prices,” he said.

Brent crude closed more than 2% higher at US$72.50 per barrel ahead of the attacks, with further gains expected when global trading resumes.

Westpac chief economist Kelly Eckhold warned motorists should expect fuel prices to rise by about 8 cents a litre within the next one to two weeks as oil prices climb and shipping costs surge through the Strait of Hormuz.

At the same time, thousands of shipping containers filled with New Zealand exports are caught up in disruption linked to the Strait of Hormuz.

Shipping firm Kotahi said all shipping lines have suspended services through the strait and confirmed it currently has the equivalent to roughly 4000 20-foot containers in transit on the affected trade lane.

Nearly all red meat exports to the Gulf Co-operation Council pass through Hormuz.

The Meat Industry Association said congestion and delays would primarily affect chilled exports, worth $166 million last year.

Export New Zealand’s Joshua Tan said “there are probably more questions than answers” at this stage and advised exporters to work closely with logistics providers and keep customers informed.

Read more over at 1News

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