Sharemarket falls further in early trading

Tuesday 22nd February 2011

The New Zealand sharemarket followed on from yesterday's tumble to fall further in early trade, after oil prices charged to fresh 2-1/2 year highs as traders reacted to increasing violence in major producer Libya.

Around 10.15am the benchmark NZX-50 index was down 9.35 points to 3372.59, having dropped 30 points yesterday.

Contact Energy (NZX: CEN ) dropped 4c to 46.15, after reporting half year underlying earnings after tax barely changed from a year earlier while revenue rose 12%. Yesterday its shares lost 6c.

Nuplex (NZX: NPX ) dropped 5c to $3.67, Auckland Airport (NZX: AIA ) dropped 2c to $2.24, Ebos Group (NZX: EBO ) fell 2c to $7.57, Fletcher Building (NZX: FBU ) lost 2c to 48.28, and Telecom (NZX: TEL ) slipped 1c to 219.

NZ Refining Co (NZX: NZR ) was up 5c early to $4.90, while Abano Healthcare (NZX: ABA ) added 4c to $4.70. Diligent Boardbooks (NZX: DIL ) gained 4c to 85 after reporting revenue up 66% in 2010, with total annualised licence fee income up 59%.

US markets were closed for a holiday, while in Europe equities lost more than 1% on a combination of uncertainty over the future of the oil price, increasing signs that higher interest rates may be coming and more evidence of a surprisingly poor earnings season.

Together, the worries overshadowed reports of solid European economic growth.

Gold powered to its highest levels in seven weeks, above $US1400 an ounce, helped along by both inflation fears and risk aversion.

NZPA

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