Friday 7th May 2010 |
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New Zealand shares fell, joining a global slide amid fears Greece’s debt crisis is actually Europe’s crisis.
Fletcher Building, the nation’s biggest construction company, paced the decline and Telecom edged lower after posting a drop in earnings and flagging uncertainty in the outlook.
The NZX 50 Index fell 59.078, or 1.8%, to 3158.846, the lowest close since Feb. 26. Within the index, 4 stocks fell, just one rose and five were unchanged. Turnover was $121 million, dominated by trading in Fletcher.
Equities fell in Europe and the US as investors speculated on how far contagion could spread from Greece and other indebted European nations. Japan’s Nikkei 225 Index fell 3.1%, while the Standard & Poor’s 500 dropped 3.2% overnight. The slump in the U.S. was briefly exacerbated by computerised share trading that drove the Dow to its biggest slump since 1987.
Europe’s debt crisis “is not new news but people have just become more focused on it again,” said David Price, a broker at Forsyth Barr. “The market’s been looking for a reason to check its meteoric rise and it has found it.”
Price said New Zealand may outperform because the nation doesn’t face the same level of fiscal concerns as those countries in Europe and indicators such as drop in the unemployment rates to 6% from 7.3% show that the economy will find its feet again.
Fletcher, the biggest company on the benchmark index, fell 2.3% to $7.96, the lowest close since March 1.Telecom fell 0.9% to $2.13 and earlier sank as low as $2.08, the lowest since the early 1990s. The nation’s biggest phone company reported a 39% drop in third-quarter earnings, less than some analysts had expected. It reiterated that full-year adjusted earnings will be at the low end of its $400 million to $440 million range.
NZX fell 1.1% to $1.75. Chief executive Mark Weldon disclosed that he had sold 216,617 ordinary bonus shares in the local bourse operator, to realise $405,679, following disposal on April 29 of an issue of bonus shares in lieu of dividend, which was offered to all shareholders.
Pan Pacific Petroleum slumped 14% to 31 cents as the price of oil paced a decline in commodities. The Reuters/Jefferies CRB Index of 19 commodities dropped 1.9% yesterday. New York crude recently traded at US$77.75 a barrel.
Westpac Banking fell $2.4% to $30.40, its third daily decline amid concern the lender may struggle to find earnings growth in the second half.
Smart Pay, the EFTPOS services company, gained 5% to 4.1 cents. It announced yesterday it will eliminate about 40 jobs involved in manufacturing terminals and outsource the work to specialist companies to cut costs.
Businesswire.co.nz
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