New Zealand shares have fallen sharply as fears about rising US interest rates sparked a return to market volatility following a long period of calm. The return of volatility - sparked by concerns that the US Federal Reserve may begin hiking interest rates sooner than expected - ended the calm that had enveloped markets since late June, following the recovery from the Brexit shock. The Chicago Board Options Exchange Volatility Index, known as Wall Street's "fear gauge", rose above 17 for the first time in 50 trading sessions on Friday, according to Bloomberg. Wall Street's rout followed comments from Boston Federal Reserve President Eric Rosengren that the US central bank faced risks if it waited too long to raise rates. Bennie said investors were having to "get their heads around" how markets would react to rising interest rates.

Source: New Zealand Herald September 12, 2016 00:19 UTC