NZ sharemarket follows world markets down

Tuesday 15th March 2011

Shares in Air New Zealand fell 7.5% in early trading, after the company said it no longer expected to be profitable in the second half of its financial year.

Last month the airline had said expected to make a profit in the six-month period, but today it said the financial impact of the Christchurch earthquake was more severe than expected, while the Japanese disaster would hit revenue.

Shortly after the New Zealand sharemarket opened, Air New Zealand (NZX: AIR ) shares were down 9c to $1.10.

More broadly, the market dropped after world stocks slid to six-week lows as the devastating toll from Japan's earthquake and tsunami unfolded.

Many global companies face disruptions after the destruction of vital infrastructure, damaged ports and factory shutdowns in the Japanese disaster, triggering worries that global growth would suffer a setback just as the world economy is emerging from the effects of the financial crisis.

Around 10.15am the benchmark NZX-50 index was down 4.55 points to 3356.64, after falling 21.6 points yesterday.

OceanaGold (NZX: OGC ) fell 6c to $3.24, Xero (NZX: XRO ) was down 4c to $2.51, Mainfreight (NZX: MFT ) lost 4c to $8.71 on low volume, Telecom (NZX: TEL ) slipped 2.5c to a six-month low of $1.96, and Fletcher Building (NZX: FBU ) slipped 1c to $8.74.

Fishing company Sanford (NZX: SAN ) was up 7c to $5.00, Pumpkin Patch (NZX: PPL ) gained 5c to $1.32, and The Warehouse (NZX: WHS ) lifted 3c to $3.46.

In the US, concerns over the economic impact of the Japanese earthquake and tsunami led to a broad sell-off in the stock market.

Nine out of the 10 sectors that make up the Standard and Poor's 500 index lost ground. Utilities companies fell 1.4 percent, the most of any group, as explosions at Japanese nuclear reactors in the wake of the disaster dimmed prospects for the nuclear energy industry.

The Standard & Poor's 500 index fell 0.6% to 1296.39, the Dow Jones industrial average lost 0.4% to 11,993.16, and the Nasdaq composite dipped 0.5% to 2700.97.

NZPA

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