Sharemarket modestly lower after commodity rout

Thursday 12th May 2011

Shares in South Island gold miner OceanaGold fell 6.5% to an eight-week low in early trade on the New Zealand sharemarket, after commodity prices were routed for the second time in a week.

The commodity decline was behind a sharp drop in shares in the United States, but in this country the sharemarket was only modestly lower shortly after opening.

Around 10.20am the benchmark NZX-50 index was down 2.58 points to 3556.29, having yesterday climbed 30.1 points to its highest level in nearly three years.

OceanaGold (NZX: OGC ) shares were down 22c to $3.15 after an 8% fall in spot silver prices, while spot gold fell 1%.

Sky City (NZX: SKC ) shares were down 3c early to $3.72, Steel & Tube (NZX: STU ) lost 2c to $2.63, and Telecom (NZX: TEL ) slipped 1c to $2.30 after yesterday's 7c rise.

Mainfreight (NZX: MFT ) gained 4c to $9.35, Scott Technology (NZX: SCT ) was up 2c to $1.45, Fletcher Building (NZX: FBU ) was unchanged on $9.05, and Contact Energy (NZX: CEN ) was down 1c to 46.03.

In the US, stocks nearly erased a three-day rally as energy and other commodity shares sank, feeding worries about the market's ability to stay on its upward path.

The Dow Jones industrial average was down 1% at 12,630.03, the Standard & Poor's 500 Index was down 1.1% at 1342.08, and the Nasdaq Composite Index was down 0.9% at 2845.06.

NZPA

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