Earthquake hits financial markets
The sharemarket fell today as investors assessed the consequences of a major earthquake in Canterbury.
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The sharemarket fell today as investors assessed the consequences of a major earthquake in Canterbury.
By 4.30pm the benchmark NZX 50 Index had sank 0.9% to 3349.996 and most stocks were in decline. It closed 0.7% lower at 3358.7.
Exceptions were Fletcher Building, which closed up 18c (2.2%) at $8.48 and Opus, which was up 7c at $2.07.
Pyne Gould Corporation was down 5.88% at 32c as reports filtered in that its building in Christchurch had collapsed.
Building Society Holdings shares were down 2c at 32c.
The company, formed from the merger of Marac Finance, CBS Canterbury and Southern Cross Building Society, said its main branch operations in Riccarton and Sydenham were undamaged, although they have been closed to allow staff to attend to their families.
Some staff were located in the Pyne Gould Corp building on Cambridge Tce, which suffered extensive damage.
Managing director Jeff Greenslade said the main focus was accounting for staff.
“We are endeavouring to make contact with all of our staff in Christchurch. That is our over-riding priority.”
Lyttelton Port shares were down 6c (2.5%) at $2.30.
Contact Energy shares fell 1.3% to $6.11 after the power company posted a December half profit of $78.8 million, compared with a $79 million profit a year earlier.
The company said it planned to tap shareholders for money to fund a $623 million construction of its 159 Megawatt Te Mihi geothermal plant.
Meanwhile, the Kiwi dollar plunged against the US dollar within minutes of the earthquake, which hit shortly before 1pm.
Westpac senior market strategist Imre Speizer said the dollar fell more than half a US cent from 76.35USc to 75.67USc.
“It has just continued to plunge in a straight line,” he said.
Two-year interest rate swaps also fell sharply, indicating the market’s early assessment is the earthquake could hinder an economic recovery.
“They’ve fallen six basis points, which is quite significant for wholesale interest rates. They usually don’t fall too much on these things. They usually don’t move too much in a day.”
Mr Speizer said currency traders reacted with speed.
“The astonishing thing here was the Kiwi started to move well before any media reports. The word of mouth had the effect already.”
NBR staff
Tue, 22 Feb 2011
Tue, 22 Feb 2011
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Earthquake hits financial markets
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