Sharemarket follows world stock prices down

Wednesday 13th April 2011

The New Zealand sharemarket followed world stock prices down, as worries about global growth spooked investors around the world.

Around 10.15am the benchmark NZX-50 index was down 11.27 points to 3440.07, on top of a 10-point fall yesterday.

Mainfreight (NZX: MFT ) lost 4c early to $9.23, Vector (NZX: VCT ) was down 3c to $2.36, Contact Energy (NZX: CEN ) lost 3c to $5.73, Restaurant Brands (NZX: RBD ) dropped 3c to $2.49, and Sky City (NZX: SKC ) fell 3c to $3.44, while Fletcher Building (NZX: FBU ) eased 1c to $9.37 and Telecom (NZX: TEL ) slipped 1.5c to 41.96.5.

Dual-listed banks dropped, with ANZ (NZX: ANZ ) down 55c to $32.00 and Westpac (NZX: WBC ) losing 50c to $32.60.

Among the few shares to rise early, The Warehouse (NZX: WHS ) lifted 3c to $3.43 and Steel & Tube (NZX: STU ) was up 2c to $2.72.

Oil prices suffered their biggest two-day loss in 11 months, while global stocks dropped on concerns about the strength of global growth and as Goldman Sachs warned crude was set for a pullback.

World stocks, as measured by the MSCI's main world equity index, were down 1.3%, the index's biggest one-day decline in four weeks.

Worries over global growth were heightened after Japan's economic minister warned that damage caused by last month's earthquake and tsunami could be worse than initially thought for the world's third-largest economy.

"The market is increasingly becoming concerned about the situation in Japan and that high oil prices and high commodity prices will eventually hurt economic growth," said Mark Bronzo, money manager at Security Global Investors in Irvington, New York.

In the US, stocks ended lower after disappointing revenue figures from aluminium maker Alcoa marked the start of the quarterly earnings season, and on worries falling oil prices could set off a reversal in the high-flying energy sector.

The Dow Jones industrial average was down 1% at 12,263.58, the Standard & Poor's 500 Index was down 0.8% at 1314.16, and the Nasdaq Composite Index was down 1% at 2744.79.

The FTSEurofirst 300 index of top European shares slipped 1.7%, with miners and energy firms among the heaviest losers. Emerging markets, which count several resource exporters in their ranks, fell 1.9%.

NZPA

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