NZ stocks fall along with global markets, oil still plummeting

New Zealand shares fell 1% at the open today, following Wall Street lower as global markets remain nervous after volatile trading in the US.

The S&P/NZX 50 Index dropped 60.5 points, or 1%, to 6053.22 as at 11am. Within the index, 43 stocks were down, six were unchanged and one rose. Turnover was about $24 million.

Wall Street tumbled overnight, as oil prices continued to fall, sapping investors' appetite for riskier assets such as stocks. Oil dropped below $US27 a barrel, with West Texas Intermediate closing at $US26.55, its lowest price since May 2003. Yesterday, the International Energy Agency warned the oil market "could drown in oversupply," with Iran's increased output following the lifting of sanctions a problem. Oil prices have fallen more than 25% this year.

The Dow Jones Industrial Average fell 249.3 points, or 1.6%, having dropped as much as 555 points in intraday trading. The Nasdaq Composite Index slid 0.3% at the close, and the Standard & Poor's 500 Index was down 1.2%.

"We're really just following what you're seeing offshore, which is more volatility, more weakness," said Mark Lister, head of private wealth research at Craigs Investment Partners. "Our market's still holding up better than a lot of those offshore, because a lot of the selling and the weakness was centred on anything that's in the business of oil. It's still a down day, and some of the higher risk companies – A2 Milk, Xero – are some of the weaker movers."

On the local index, A2 Milk Co, Coats Group and Nuplex led the market down, while Stride Property Group was the only gainer.

"The stocks performing best in our market are the more defensive ones – property companies, and companies like Air New Zealand that are beneficiaries of oil weakness," Mr Lister said.

Mr Lister said other markets across Asia will probably fall when they open later today.

"If you look at the Dow Jones, at one point it was down 550 points, which is a big fall, at another moment it was only down 150 points, and it closed somewhere in the middle. Those big swings are making it really difficult for people to get any sort of direction. You'll definitely see more markets down than up today but some markets have already seen big moves – Japan has already taken a bit of a beating, so you might see a bit of bargain hunting," Mr Lister said.