NZ sharemarket falls sharply in early trading after Wall St jolt

By NZPA

Wednesday 14th March 2007

Shares fell sharply across the board when the New Zealand sharemarket opened this morning after Wall Street suffered its second largest one-day fall in a year overnight.

The benchmark NZSX-50 index was down 37.68 points to 4068.04 after five minutes trading.

US stocks plunged as the impact of losses in the subprime mortgage group cascaded across the financial sector, knocking down shares of investment banks and traditional lenders.

The Mortgage Bankers Association reported the proportion of mortgages in the initial stages of foreclosure rose to the highest rate on record, while the chief executive of the largest US home lender said the subprime mortgage industry was now in a "liquidity crisis". The subprime sector caters to borrowers with weak credit.

An unexpected drop in retail sales for February added to concerns.

Markets around the world have been jittery since the Shanghai market took a 9% dive at the end of last month. That prompted Wall Street to plunge over 3% in its biggest one-day fall since September 11, 2001.

Last night, the Dow Jones industrial average dropped 242.66 points, or 1.97%, to end at 12,075.96. The Standard & Poor's 500 Index slid 28.65 points, or 2.04%, to 1377.95 and the Nasdaq Composite Index tumbled 51.72 points, or 2.15%, to 2350.57.

On the local scene, Telecom fell 5c to $4.78, Contact Energy 7c to $9.00, and Fletcher Building 11c to $11.01.

The only up arrow among the top 50 stocks at 10.10am was Hallenstein Glasson, gaining 3c to $5.15.

Auckland Airport fell 6c to $2.36, Tower 7c to $2.25, Cavalier 6c to $3.37, and Fisher & Paykel Healthcare 4c to $3.81.

Australian fund manager AMP was down 34c to $11.41.

One of the few risers was Allied Farmers, up 13c to $2.15.

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