Wednesday 8th October 2008
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New Zealand stocks fell, extending the benchmark index's decline this
year to 26%, as concern about slowing economic growth and more bank failures
drove down equity markets across Asia.
The Nikkei 225 fell more than 7% in Tokyo. The S&P/ASX 50 was down more than 5%. The NZX 50 had a gentler descent, falling 55.881 points, or 1.9%, to 2948.31 at the 5 p.m. close of trading in Wellington. That's the first close below 3000 in three years.
Pike River Coal, ANZ Banking Group and Fisher & Paykel Appliances were the biggest decliners.
The NZX 50's relative strength index, a measure chart-watchers sometimes use to gauge whether a security will rise or fall, had slipped to about 24 today from as much as 75 early last month. Among stocks that have tumbled more than 40% this year, Fletcher Building is rated a "buy" by six of 11 analysts who follow the stock. Rakon also has three buy recommendations and Warehouse Group has two.
"It's a great environment for bottom-up analysts," said Guy Elliffe, head of equities at AMP Capital Investors, the nation's largest fund manager. "We're pretty confident with the market at its current levels."
The New Zealand fell below 62 U.S. cents, trading at 61.86 cents at 6:15 p.m. in Wellington. The kiwi dollar has dropped as much as 23% from its highs in February.
Helping weigh on the currency, some traders are betting the central bank will cut the official cash rate by more than 50 basis points this month, after the Reserve Bank of Australia cut by 100 basis points. ASB Bank predicts a 75 basis point cut on Oct. 23.
Among gainers today, Sanford rose 2.6% to NZ$5.59. The fishing company benefits from a weak currency when it sells product overseas .
"It's a relatively fertile environment - there are a lot of beneficiaries of the New Zealand dollar's weakness," Elliffe said.
Fletcher Building fell 0.9% to NZ$6.36 and Rakon fell 3% to NZ$2.18. Telecom, the biggest company on the NZX 50, dropped about 4% to NZ$2.67.
Pike River fell 6.5% to NZ$1.45, ANZ Banking declined 5.7% to NZ$19.80 and F&P Appliances dropped 4.5% to NZ$1.50.
Dominion Finance traded unchanged at 1 cent, having slumped almost 100% this year, after announcing it has cancelled its annual meeting and will appoint a voluntary administrator.
|NZ Top 50||2,948.310||-55.881 (-1.86%)|
|ASX 200||4,388.100||-230.600 (-4.99%)|
|FTSE 100||4,605.22||+16.03 (+0.35%)|
Last updated: 8/10/2008 5:08pm
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