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NZX 50 slumps and bumps to finish down 0.7 percent


The New Zealand sharemarket fell out of bed when it woke up today, and dropped sharply in the wake of United States stocks being driven lower by escalating Greek debt woes and troubling US economic data.   

NZPA
Thu, 16 Jun 2011

 

The New Zealand sharemarket fell out of bed when it woke up today, and dropped sharply in the wake of United States stocks being driven lower by escalating Greek debt woes and troubling US economic data.

NZ shares clawed back some ground in the first hour of trading, but then slipped and slid their way though the following four hours, with the benchmark NZX 50 index rising and falling in a narrow range of four or five points.

It fell steeply again as Asian stocks slid to their lowest level in nearly three months, and Greek troubles also caused the euro to wobble.

Greek politicians are struggling to push through a harsh austerity bill with the raft of tax rises and spending cuts needed to receive a new European Union

International Monetary Fund bailout and a 12 billion euro slab of aid to pay back debt that matures in August. 
These escalating tensions in the euro zone were blamed -- more than the weaker growth and heavy selling on Wall Street -- for the pressure on Asian equity markets, Reuters reported.

The Kospi was the worst performer, down 1.9 percent while elsewhere, Japan's Nikkei 225, China's Shanghai Composite and Hong Kong's Hang Seng were all down more than 1 percent. Shares of materials and technology companies were among the weakest performers on fears of faltering global growth.

Melbourne-based market strategist Ben Potter, of IG Markets, said the plunging global markets had again answered the hoary old question of "how high can a dead cat bounce?" with "not very".

Wednesday's 24 hours of gains across global markets was a classic short covering rally that was quickly erased as waves of fear and concern saw traders aggressively selling risk currencies, commodities and equity markets. At 10.30am the benchmark NZX-50 index was down 26.58 points, to 3479.791, after yesterday climbing 17 points.

Though the index made a dozen or more efforts to recover that lost ground, it ended the day at 3481.607, down 24.76 points (0.706 percent) having traded 30 million shares valued at $108.76 million.

Overall, there were 18 rises and 49 falls among the 102 stocks traded -- a total volume of 32.3m shares valued at $110.83m.

Freightways lost 9c in early trade but finished down 5c at 341, while Skellerup was down 5c to 120, Mainfreight fell 8c to 1010, NZX slumped 8c to 236, SkyCity dropped 4c to 362, cornerstone stock Telecom fell 3.5c to 240, and Fletcher Building was down 10c to 857.

Pumpkin Patch, which yesterday lowered its profit forecast and announced changes including the closure of its 20 stores in the United States, was down 5c to 104. Kathmandu Holdings fell 6c to 214.

Dual-listed bank Westpac fell 68c to 2782, while ANZ lost 30c to 2810.

Across the Tasman, Australian stocks closed at their lowest in more than nine months as investors fled the market.

The benchmark ASX200 index slid 87.6 points, or 1.9 percent, to 4479.2, while the broader All Ordinaries index fell 88.7 points, or 1.9 percent, to 4546.7.

Today's drop lopped more than $A25 billion from the overall market's value. The ASX200 has lost about 4.5 percent this month so far, placing it on course for the worst monthly drop since May last year when concern about European's sovereign debt crisis last flared.

In the US, the Dow Jones industrial average dropped 1.5 percent to 11,897.27, the Standard & Poor's 500 Index lost 1.7 percent to 1265.42, and the Nasdaq Composite Index slid 1.8 percent to 2631.46.

NZPA
Thu, 16 Jun 2011
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NZX 50 slumps and bumps to finish down 0.7 percent
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