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NZ's benchmark stock index falls to 3-month low, joining global slide

Tuesday 5th June 2012

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New Zealand shares fell to a three-month low when trading resumed after a three-day weekend, joining a global slide driven by renewed European fears and weaker employment and manufacturing data in the US.

The NZX 50 index fell 0.9 percent to 3,422.3038, the lowest since March 8. The local market was closed for the Queen's Birthday holiday yesterday.

On Wall Street, the Standard & poor’s 500 Index closed at 1278.18, the lowest since Jan. 6 and German's DAX 30 fell 1.2 percent yesterday.

Weaker-than-expected economic figures have stoked speculation the Federal Reserve Bank will take further steps to bolster the world’s biggest economy while leaders of Group of Seven nations have agreed to discuss Europe's debt crisis, with Spain likely to be top of the agenda.

Euro leaders have also agreed to discuss closer banking cooperation after the European Commission called for a "banking union" to integrate tighter supervision of lenders and create a pool of EU funds to clean up banks with cross-border exposure.

"We have seen some sellers coming into the market on the back of Wall Street losing ground last Friday," said Grant Williamson, director at Hamilton Hindin Greene. "It's not a big reaction from our market - the local market is performing well in the weak global uncertainty."

"We will wait for Australia to open and I wouldn't be surprised if there aren't a few bargain hunters out there," he said.

Fletcher Building, the largest construction company on the NZX 50, fell 1.5 percent, while shares in Telecom shed 0.6 percent. Outdoor clothing retailer, Kathmandu led the decline down 2.7 percent. Oceanagold was the biggest gainer up 6.5 percent.

BusinessDesk.co.nz

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