Thursday 23rd October 2008
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New Zealand stocks tumbled for the second day, pushing the NZX 50 down 2.9%,
as widening concern about a global economic slump drove down share prices from
Tokyo to New York.
The NZX 50 fell 92.06 to 2807.34 led by Telecom Corp. and Pike River Coal. Contact Energy shares fell after the company said profit growth will probably stall this year.
In the U.S. yesterday, the Dow Jones Industrial Average fell 5.7%, the Standard and Poor’s 500 declined 6.1% and Nasdaq Composite fell 4.8%. In Tokyo today, the Nikkei 225 Index was down 5.6% in midday trading. Mazda Motor tumbled 18% to 203 yen on reports that Ford Motor Co. is planning to sell 20% of the Japanese auto-maker.
Australia’s S&P/ASX 200 fell 4.37% to 3794.4. Mining companies including Rio Tinto, Newcrest Mining, Lihir Gold and BHP Billiton paced the decline as prices of commodities tumbled.
In New Zealand, Reserve Bank Governor Alan Bollard cited the “ongoing financial turmoil and a deteriorating outlook for global growth” as reason for cutting the Official Cash Rate today.
“Big falls are driven by people worried about global growth,” said James Lindsay, a fund manager at Tyndall investment management. “It’s a relief to see the OCR cut, though it’s well anticipated, well forecast and going in line with the move by the RBA,” he said.
Telecom fell 7.4% to NZ$2.26, nearing the record low of NZ$2.22 it reached on Oct 16, a day after the company cut its earnings forecast by up to 8% because of increased investment in its high-speed mobile network.
Pike River Coal fell 5.8% to NZ$1.29 and New Zealand Oil & Gas dropped 4% to NZ$1.18 amid concern a global slowdown will curb demand for fuel and for coking coal to fire steel mills. Crude oil rose from a 16-month low before an OPEC meeting which is scheduled to consider production cuts.
ANZ Banking Group’s New Zealand shares fell 4.7% to NZ$20.35 after the Australian lender posted a 21 percent drop in annual profit to A$3.32 billion on rising provisions for bad loans.
Port of Tauranga fell 0.8% to NZ$6.55, outperforming the benchmark NZX 50 Index, after Chairman John Parker told shareholders at their annual meeting that the company expects to exceed last year’s NZ$42 million profit and is expecting a proposal to buy its container business from Ports of Auckland.
Contact Energy Ltd. fell about 4% to NZ$7.02 after the biggest energy company on the NZX 50 told shareholders profit growth may stall this year on the impact of drought in the south and constraints on the Cook Strait cable.
|NZ Top 50||2,807.339||-92.059 (-3.18%)|
|ASX 200||3,974.400||-181.700 (-4.37%)|
|FTSE 100||4,040.89||-188.84 (-4.46%)|
Last updated: 23/10/2008 5:09pm
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