Wednesday 29th October 2008
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Insurer AMP tumbled 11% to $5.90 on the NZX, playing catch-up with its Australian shares when the New Zealand market reopened after the Labour Day holiday. AXA New Zealand froze three funds in a sign the impact of the financial crisis is widening.
Australia's S&P/ASX 200 Index was down 1% to 3802 in late trading in Sydney. Wesfarmers fell 7.4% to A$18.33, Alumina declined 6.6% to A$1.91 and AMP dropped 5.8% to A$5.16. National Australia Bank declined 5% to A$22.69.
Shares fell in late trading on Wall Street yesterday, sending the Dow Jones Industrial Average down 2.4% to 8175.77. General Motors declined 8% after Moody's Investors Service cut the automaker's credit rating.
"The world is slowing down and it is going to be tough for a wee while yet," said Paul Robertshawe, who oversees $300 million of stocks at Tower Asset Management. "Boral came out with some pretty tough numbers," he said on Fletcher's decline.
Telecom fell 4 cents, or 1.7%, to $2.27. Fletcher fell 27 cents, or 4.7%, to $5.53. Boral, Australia's largest building products company, last week said earnings will decline because of a slump in U.S. housing starts and weaker demand at home.
Fishing company Sanford was among a handful of rising stocks, as the New Zealand dollar fell to a five-year low versus the US dollar, helping lift the value of the company's export earnings. Sanford rose 4.7% to $5.55 and has advanced 30% this year.
Retailers were among the biggest decliners today. Jeweler Michael Hill International fell 9.1% to 60 cents, Pumpkin Patch fell 9% to $1.01, Warehouse Group declined 8.8% to $3.65 and Hallenstein Glasson dropped 8.6% to $2.33.
Contact Energy fell 3.1% to $6.64, its fourth daily decline, hurt by negative publicity about the utility's decision to bolster directors' fees while raising its prices.
Robertshawe said the slump in stocks has un-earthed "some real value" in the stock market, including Contact.
"The market looks relatively cheap," he said. "We've got tax cuts kicking in, the petrol price has been coming back and we've still got a lot of ammo in the interest rate easing cycle," he said.
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