RTTNews - The New Zealand share market opened steeply lower on Tuesday, following more steep overnight losses on Wall Street, where U.S. stocks plunged on mounting concern over an economic recovery.
The benchmark NZX 50 index was down 51.50 points or 1.67% to 3,034.58 shortly after the market opened for the day, while the broader NZX All Capital index dropped 45.45 points or 1.45% to 3,080.64
The New Zealand market joined the Asia-Pacific region-wide decline on Monday, with the benchmark NZX-50 index declining 65.2 points or 2.1 percent to 3,086.8. The New Zealand Stock Exchange reported trading volume of 31.2 million shares valued at NZ$62.8 million.
Overseas, U.S. stocks saw a sharp pullback on Monday, as last week's disappointing data on the health of the consumer sparked a broad-based sell-off in equities. The major averages all finished substantially lower, as some speculated that the markets rose in spite of weak fundamentals.
Also deflating traders' mood was news that Lowe's (LOW) second quarter earnings and revenues fell short of estimates. The home improvement retailer also provided disappointing guidance.
Nonetheless, some of the pessimism was moderated by the release of a report from the Federal Reserve Bank of New York showing that conditions for New York manufacturers improved for the first time in well over a year in the month of August.
The New York Fed said its general business conditions index rose to 12.1 in August from a negative 0.6 in July, with a positive reading indicating an expansion in the manufacturing sector. Economists had been expecting the index to increase more modestly to 3.0.
U.S. stocks rose by a modest margin after the National Association of Home Builders released its report on homebuilder confidence in the month of August, showing that its homebuilder confidence index rose to its highest level in over a year.
The report showed that the NAHB/Wells Fargo Housing Market Index rose to 18 in August from 17 in July. With the increase, which came in line with economist estimates, the index rose to its highest level since June of 2008.
The major U.S. averages remained stuck in the red going into the close, finishing near their worst levels of the day. The Dow closed down by 186.06 points or 2 percent at 9,135.34, the Nasdaq fell by 54.68 points or 2.8 percent to 1,930.84 and the S&P 500 slipped by 24.36 points, or 2.4 percent to 979.73.
Crude oil finished lower again on the New York Mercantile Exchange on Monday, as lower global equities raised concerns about energy demand. Oil was also hurt by a stronger U.S. dollar, although it ended the session off its lows of the day. Light sweet crude plunged to $66.75 per barrel, down 76 cents on the session, extending the sharp drop seen on Friday. Prices fell as low as $65.23 a barrel earlier in the session.
On the currency front, the New Zealand dollar was buying US66.83c by about 8 am on Tuesday, little changed from its level at 5 pm on Monday. The kiwi had dropped to a low of US66.45c during the night.
In the early trading on the New Zealand stock market on Tuesday, market leader Telecom lost 1.10%, as second ranked Contact Energy dropped 2.23% and Fletcher Building, the third best stock, fell 2.88%.
In the retail sector, Hallenstein Glasson posted a gain of 1.03%, while jewelry retailer Michael Hill International gave up 1.47%, Pumpkin Patch fell 3.23% and Warehouse remained unchanged. Among energy stocks, TrustPower eased 0.53%, as Vector slipped 0.96%.
Among dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged on Tuesday morning.
Among other notable stocks, Infratil fell 2.76%, Methven dropped 1.38%, Mainfreight plunged 3.81%, Nuplex plummeted 9.05%, Sky City lost 2.41%, Sky Network Television gave up 1.29% and Steel & Tube Holdings remained unchanged. While Fisher & Paykel Appliances declined 5.00%, Fisher & Paykel Healthcare slipped by 2.12%.
Apart from Hallenstein Glasson shares, the lone gainer among the stocks listed under the benchmark NZX 50 index on Tuesday morning was ING Property Trust, with the company's stocks posting a gain of 1.35% in the day's early trading.
The major losers the day's early trading included-- Auckland International Airport by 1.75%, Air New Zealand by 2.33%, AMP NZ Office Trust by 1.25%, Cavalier by 2.04%, Freightways by 3.23%, Guinness Peat Group by 1.59%, New Zealand Oil and Gas by 1.22%, New Zealand Refining Company by 2.17%, Pike River Coal by 3.36% and Rakon by 4.86%.
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