MARKET CLOSE: NZX finishes down again

NZPA

Monday 14th March 2011

The New Zealand sharemarket slumped today as the Nikkei 225 index was pounded down nearly 6%, and other regional markets such as the Kospi, Hang Seng and Shanghai Composite weakened in the wake of Japan's continuing tragedy.

At lunchtime, the NZX top 50 index dropped sharply, falling 16 points in just over half an hour, apparently as investors recognised potential concerns over the outlook for Japan's already troubled economy -- and its future imports

The benchmark index fell 0.64% to finish at 3361.19, down 21.6 points from last Friday's close. It finished down 23.39 points on Friday.

Today, 40 million shares were traded, with a total value of $79.8m.

New Zealand investors struggled to come to grips with the financial uncertainty over the quake and tsunami in Japan, as analysts and commentators pointed to Japan's importance as fourth-biggest trading partner, taking 8% of the nation's exports.

But the ASB Bank suggested disruption to New Zealand exports was likely to be limited, and pointed to a bright spot.

"Forestry is New Zealand's second largest merchandise export to Japan, leaving New Zealand well placed when reconstruction efforts eventually begin," it said.

Cornerstone stock Telecom was down 5.5c at $1.98 and Fletcher Building was down 4c at $8.75 but NZOG was up 1c at 93c.

Tower shares fell 7c to $1.79 after dropping 4% on Friday as the insurer and fund manager disclosed that its costs are likely to be driven up by as much as $20 million by the Christchurch earthquake and its aftershocks.

NZ Refining was initially untraded but rose 3.6%, up 18c to $5.08 after oil refinery shares rose in the wake of Japan's refinery capacity being reduced by the quake.

The ASX 200 index, which initially shed 78 points, or 1.7%, ended the day down 22 points at 4712, a fall of 0.4%. The main losers were insurance companies and uranium miners: uranium projects were expected to be less profitable as countries around the world review plans to open nuclear power plants.

In the US the Dow Jones industrial average rose 59.79 points, or 0.50%, at 12,044.40. The Standard & Poor's 500 Index climbed 9.17 points, or 0.71%, at 1304.28. The Nasdaq Composite Index added 14.59 points, or 0.54%, at 2715.61.

Japanese shares traded in New York fell sharply. The Bank of New York Mellon's index of Japanese ADR's lost 2.1%. Toyota Motor Corp lost 2.1% to $85.65.

Investors said some industrial shares could benefit in the rebuilding operation in Japan but said information on the extent of damage was still scarce.

Howard Ward, a fund manager at the GAMCO Growth Fund, said speculative moves would likely be a short-lived overreaction.

"It's generally a mistake for people to be too reactive to a natural disaster like this," he said.

"The long-term impact is probably going to favour large equipment CAT-type stocks and some of the basic materials," said Marco Pado, US market strategist at Cantor Fitzgerald & Co.

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