However, rising yields remained a big factor and would continue to dominate sharemarkets through the year, Main said. As inflation rises, interest rates go up, giving investors an alternative to stocks as returns from money in the bank also rise.
The market was not being decimated, “but we’re seeing some of the cream come off”, he said.
LAWRENCE SMITH/Stuff
The New Zealand sharemarket clawed back most of Monday’s losses with a 3.4 per cent jump in the price of Fisher & Paykel Healthcare, to $28.29 a share.
The big challenge for investment markets this year was the stand-off between central banks, which expected inflation to rise but believed it would be temporary, and investors, who believed inflation would continue to rise and central banks would be caught out unless they moved to stop it.