Wednesday 22nd October 2008
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New Zealand stocks fell, snapping a three-day rally, as concerns rose that
the global economy is headed for a slump, eroding corporate earnings.
The NZX 50 Index fell 52.621, or 1.8%, to 2899.398 at the 5 p.m. close of trading in Wellington. Fletcher Building and Fisher & Paykel Healthcare were among the biggest decliners. AMP and Westpac banking fell, tracking a slide in most Australian financials.
Shares on Wall Street fell yesterday, sending the Standard & Poor’s 500 Index down 3% and the Nasdaq Composite down 4% after Sun Microsystems missed revenue estimates and Texas Instruments forecast lower-than-expected earnings.
In Asia today, the Nikkei 225 fell 6.8% to 8674.69 in midday trading while Australia’s S&P/ASX 200 Index declined 3.3% to 4174.3. Commodity companies including Lihir Gold, Newcrest Mining and BHP Billiton were among decliners in Australia as commodity prices fell.
“We’re left with a very bleak growth outlook for at least the next 18 months,” said Angus Gluskie, who helps manage A$450 million at White Funds Management in Sydney. “Heavily cyclical stocks will continue to struggle.”
Fletcher Building dropped 5% to NZ$6.12, bringing its decline this year to 45%. Chairman Roderick Deane last month said the construction and building products company is headed for “a tougher year than the one just experienced.” The company declined to forecast 2009 earnings.
F&P Healthcare fell 3% to NZ$3.17. The stock has climbed more than 40% in the past three months, helped by a declining New Zealand dollar, which lifts the value of its U.S. dollar earnings. The company, which is set to post its results next month, said after the close of trading today that the weakening currency means operating profit “would have the potential to be higher” than forecast.
Westpac Bank’s New Zealand shares fell 4.2% to NZ$25.10. The Australian lender today postponed a sale of so-called uridashi bonds, aimed at retail investors in Japan, because of market conditions, sale manager Normura said today, according to Reuters. Insurer AMP declined 5.6% to NZ$6.90. Contact Energy Ltd., the biggest energy company on the NZX 50 Index, fell 3.2% to NZ$7.31 and is down 12% in the past month.
Cavotec MSL Holdings jumped 3% toNZ$3.30, bringing its two-day advance to 10%. The manufacturer today said it successfully completed two weeks of trials of its PCAir cooling system at Airbus’s Toulouse production plant. The shares are down 30% this year.
Telecom Corp., the biggest stock on the index, was unchanged at NZ$2.44 and has fallen 10% in the past month.
|NZ Top 50||2,899.398||-52.621 (-1.78%)|
|ASX 200||4,156.100||-146.400 (-3.40%)|
|FTSE 100||4,229.73||-52.94 (-1.24%)|
Last updated: 22/10/2008 5:07pm
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