NZ sharemarket pummelled after US downgrade

NZPA

Monday 8th August 2011

The New Zealand sharemarket was pummelled when it opened for the start of the week, after Standard & Poor's downgraded the United States by one notch to AA+ on the weekend.

About 20 minutes after the NZX opened, the benchmark NZX-50 index was down 95.02 points, or 2.9 percent, to 3181.49.

Today's early sharp fall came after the index plunged nearly 3 percent on Friday, as investors feared further losses in US equities which had their worst selloff in two years on Thursday.

In early trading today Fletcher Building lost 26c or 3.4 percent to 745, Mainfreight was down 23c or 2.2 percent to 1010, Abano Healthcare dropped 18c or 4 percent to 430, Sky TV dropped 14c to 550, Contact Energy fell 13c to 490, Hallenstein Glasson was down 10c to 340, Sky City lost 14c to 336, Fisher & Paykel dropped 9c to 240, Ryman Healthcare was down 8c to 250, and Vector fell 8c to 235.

Stocks losing 7c early included Ebos Group to 670, Restaurant Brands to 220, Freightways to 325, and Infratil to 169, while OceanaGold lost 6c to 239, Nuplex lost 6c to 250, Auckland Airport lost 6c to 217, and Telecom fell 5c to 252.

In the US on Friday (local time), before the S&P downgrade, stocks closed out their worst week in more than two years in a volatile session that saw the major indexes whip back and forth.

More than 15.9 billion shares -- or more than twice the daily average volume -- traded in the busiest day in more than a year as investors ploughed into cash-rich mega-cap stocks that had been beaten down in recent days as the market dropped.

The intense selling last week reflected frustration with sluggish economic growth and politicians' inability to address pressing concerns over high public debt in Europe and the United States.

The Dow Jones industrial average rose 0.5 percent to end at 11,444.61, while the Standard & Poor's 500 Index edged down 0.1 percent to finish at 1199.38, and the Nasdaq Composite Index slipped 0.9 percent to close at 2532.41.

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