Market close: NZX 50 drops to 4-year low, Telecom shares retreat

Thursday 16th October 2008

New Zealand shares fell, pushing the benchmark index down 4.8% to a four-year low, as the prospects of a sustained bout of weakness in the global economy sapped demand for stocks.

The NZX 50 fell for the ninth day in 10, shedding 139.954 to 2764.688 as the 5 p.m. close of trading in Wellington. Telecom yesterday reduced its profit forecast, kicking off a 24-hour period that included warnings from companies such as EBay.

As stock markets around the globe fell, governments stepped up efforts to restore confidence in the financial system and underpin lenders, with the Swiss government and central bank helping dispose of some 60 billion Swiss francs of illiquid assets.

Australia’s S&P/ASX 200 Index fell 6.8% to 4005.1, and dipped below 4000 for a second time this week. The last time before that was in mid-2005. Japan’s Nikkei 225 was down more than 10%.

“The world economy is giving up the ghost of its inflationary past and subsiding into a recessionary phase,” Craig Ebert, senior markets economist at Bank of New Zealand, wrote in a report today. “The scrambled financial and fiscal packages, while significant, can only soften the blow.”

Telecom fell 8.6% to NZ$2.23, reaching the lowest level since the early 1990s, when the phone company was a fledgling performer. At today’s price it has a dividend yield of about 18%. Pike River Coal lurched down 12% to NZ$1.29 and New Zealand Oil & Gas fell 8.9% to NZ$1.12.

Crude oil fell on speculation a weaker world economy will be less thirsty for fuel. Crude for November delivery fell to about US$73.43 a barrel in Asian trading.

Australian insurer AMP’s NZX-listed stock fell 10% to NZ$6.45.

U.S. stocks had their biggest slump since the 1987 crash after figures showed retail sales fell, stoking concern the world's biggest economy is sinking into recession and that government efforts to bail out the financial system won't be enough to arrest the slide. The Standard & Poor's 500 Index tumbled 9% to 907.84 and the Dow Jones Industrial Average slid 7.9% to 8577.91. The NASDAQ Composite fell 8.5%.

Nuplex Industries fell 8.6% to NZ$5.30 on the prospects of waning demand for the resins and chemicals it makes for use in paints, printing ink and adhesives. Carpet maker Cavalier declined 7.7% to NZ$2.40.

www.businesswire.co.nz

NZ Top 50	2,764.688	-139.954 (-4.82%)
ASX 200	4,013.400	-286.600 (-6.67%)
Dow	8,577.91	-733.08 (-7.87%)
Nasdaq	1,628.33	-150.68 (-8.47%)
FTSE 100	4,079.59	-314.62 (-7.16%)

Last updated: 16/10/2008 5:10pm

AIA	1.73	-0.10
AIR	0.82	-0.05
AMP	6.45	-0.74
ANZ	19.50	-1.03
APN	3.53	0.00
APT	1.07	0.00
CAV	2.40	-0.20
CEN	7.13	-0.22
EBO	4.25	-0.13
FBU	5.86	-0.37
FPA	1.35	-0.14
FPH	2.87	-0.08
FRE	3.20	-0.15
GFF	1.62	-0.10
GMT	1.10	-0.04
GPG	0.96	-0.06
HLG	2.60	0.00
IFT	1.90	-0.13
IMP	1.10	0.00
ING	0.62	-0.04
KIP	1.10	-0.02
LNN	10.20	0.00
MFT	5.23	-0.17
MHI	0.70	-0.04
MVN	1.25	-0.07
NPX	5.30	-0.50
NZO	1.12	-0.11
NZR	6.15	-0.35
NZS	1.15	-0.05
NZX	5.90	-0.10
PFI	1.08	-0.03
PGW	1.69	-0.06
POT	6.50	-0.10
PPL	1.05	-0.08
PRC	1.29	-0.18
RAK	2.15	-0.07
RYM	1.45	-0.10
SAN	5.35	-0.01
SKC	2.99	-0.08
SKL	0.78	-0.07
SKT	3.94	-0.06
STU	3.60	-0.10
TEL	2.23	-0.21
THL	1.12	-0.03
TLS	4.36	-0.28
TPW	6.85	-0.18
TWR	1.36	-0.09
VCT	2.03	-0.05
WBC	24.09	-1.66
WHS	3.57	+0.03

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