New Zealand’s financial markets are coming under pressure as a closely contested general election increases uncertainty over the country’s next government and policy direction.
The benchmark S&P/NZX 50 Total Return Index has lost momentum after reaching a record high in August. Investors have become more cautious ahead of the Nov. 7 vote, with recent polls indicating a tight contest and a potentially complicated process for forming a government.
The New Zealand dollar has also weakened against the US dollar, losing around 6% of its value since late August. The combination of a close election and the prospect of drawn-out coalition talks is creating headwinds for both local stocks and the currency.
Sources: Bloomberg Markets.