Stocks fall for 2nd day, GPG extends slide

Thursday 8th January 2009

New Zealand shares fell for a second day after signs of a weakening U.S. jobs market and waning corporate earnings weighed on Wall Street. Guinness Peat Group fell for a second session after its profit warning yesterday.

The NZXZ 50 fell 7.59, or 0.3%, to 2756.65. Within the index, 23 stocks fell, seven rose and 20 were unchanged, with some 24.8 million shares changing hands. Guinness Peat fell 4.1% to 94 cents, bringing its two-day slide to 9.6%. the company released a valuation of its assets yesterday that amounted to NZ$1.33 a share while saying profit would miss its target.

Children's clothing chain Pumpkin Patch dropped 4% to 96 cents and is down 60% in the past 12 months as the economic slump erodes demand. New Zealand Oil & Gas fell 1.6% to NZ$1.26 as the price of oil tumbled. The part owner of the Tui oilfield said the field in the offshore Taranaki basin produced its 20 millionth barrel of oil today.

Crude oil fell the most in seven years in New York and was recently at US$42.80 a barrel in Singapore.

AFFCO Holdings Ltd., the North Island meat processor, fell 2.6% to 38 cents after a report that it is laying off 100 seasonal workers at its Fielding plant because of a drop in stock for processing.

PGG Wrightson Ltd. led gaining shares, rising 2.9% to NZ$1.44. Fishing company Sanford Ltd., one of only two gainers on the NZX 50 last year, fell 1.6% to NZ$5.41.

In Sydney, the S&P/ASX 200 Index fell 2.3% to 3694.3 after investment group Babcock & Brown's stock was halted pending the decision of its banks on whether to approve its survival plans. The two separately listed investment funds it manages fell amid concern their finances could be compromised if the parent fails. Babcock & Brown Infrastructure tumbled 17% to 12 cents and Babcock & Brown Power fell 13% to 10.5 cents.

Macquarie Group, Australia's largest investment bank, fell 3.8 to A$32.46 after saying it faced "exceptionally challenging" markets. The bank agreed to sell a A$1.5 billion margin loan book to Bendigo & Adelaide Bank for A$52 million.

Telstra Corp. fell 1.9% to A$3.69 after saying it may lose up to A$2 billion in sales when a nationwide high-speed Internet network is rolled out after the company bid to build the network was disqualified by the federal government. Rio Tinto fell 6.6% to A$43.85 and BHP Billiton, the world's largest miner, fell 1.9% to A$30.68 as commodity prices ended their rally.

In Tokyo, the Nikkei 225 Index tumbled 3.6% to 8907.7 in early afternoon trading, following the slide on Wall Street on concern the global economic slump will hurt corporate earnings. Sony Corp. fell 3.5%.

By Jonathan Underhill

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