New Zealand share market opened weaker on Tuesday, following a negative overnight lead from the Wall Street where U.S. stocks closed lower after disappointing auto sector news results prompted a sell-off.
The benchmark NZX 50 index was down 35.04 points or 1.33% to 2,606.94 shortly after the market opened for the day, while the broader All Capital index fell 37.62 points or 1.40% to 2,647.00.
The New Zealand market closed lower on Monday, with the NZX 50 index ending the day's trading at 2641.988, down 11.487 points or 0.43%. Turnover of 23 million stocks was worth $61.7 million.
Overseas, U.S. stocks saw continued weakness throughout the trading day on Monday after moving sharply lower in early trading. While the major averages did not see much follow-through on their early downward move, they remained stuck firmly in negative territory.
The weakness in the markets came as investors responded to disappointing news regarding the auto industry as well as renewed concerns about the outlook for the financial sector. Some traders also looked to cash in on the gains seen in the three previous weeks.
Much of the selling pressure came as President Obama and his auto task force indicated that General Motors (GM) and Chrysler have not gone far enough in their restructuring plans and need to step up their efforts to reorganize in order to receive additional government aid.
While the administration will continue to provide operating funds for the next few weeks, it has given both GM and Chrysler a final deadline, threatening bankruptcy if the beleaguered auto giants do not significantly increase their efforts to restructure their business.
The major U.S. averages regained some ground going into the close of trading, but they remained firmly negative. The Dow closed down 254.16 points or 3.3 percent at 7,522.02, the Nasdaq closed down 43.40 points or 2.8 percent at 1,501.80 and the S&P 500 closed down 28.41 points or 3.5 percent at 787.53.
Crude oil prices plunged below $50 on the New York Mercantile Exchange on Monday as worries over the U.S. auto and banking industries has fueled demand concerns again. A stronger dollar also lessened the hedge appeal of commodities.
Traders also looked forward to the release of the Energy Information Administration's inventory data on Wednesday. Last week's report showed crude oil inventories increased 3.3 million barrels in the week ended March 20. Analysts were expecting a rise of about 1.2 million barrels. The build is the 22nd in 26 weeks.
Light sweet crude for May delivery finished the session at $48.41, down $3.97 for the session. Prices touched as low as $48.11 in mid-day trading.
On the currency front, the New Zealand dollar was buying US56.08c by 8 am on Tuesday, compared to US56.46c at 5pm on Monday.
In the early trading on the New Zealand Market on Tuesday, the top ranked share Telecom fell 1.29%, as second ranked Contact Energy dropped 1.02% and third ranked Fletcher Building declined 1.55%.
In the retail sector, Hallenstein Glasson added 1.43%, as jewelry retailer Michael Hill International and Pumpkin Patch remained unchanged. The Warehouse Group slipped 0.56%.
In the energy sector, Vector and TrustPower remained unchanged in the early trading on Tuesday.
Among the dual listed shares, AMP dropped 1.19%, as Australia and New Zealand Banking, APN News & Media, Lion Nathan and Telstra remained unchanged. Westpac Banking Corporation fell 0.64%.
Among other notable stocks, Infratil, Mainfreight, Methven and Steel & Tube Holdings remained unchanged, as Nuplex Industries plunged 6.17%, Sky City Entertainment slipped 0.70% and Sky Network Television gave up 0.72%.
Fisher & Paykel Appliances Holding tumbled 4.00%, as Fisher & Paykel Healthcare Corp gave up 1.84%.
Among the major losers in the day's early trading were- Auckland International Airport by 0.58%, Goodman Property Trust by 1.20%, ING Property Trust by 1.75%, Kiwi Income Property Trust by 1.03%, New Zealand Oil & Gas by 2.22%, Pike River Coal by 12.22%, Ryman Healthcare by 1.41% and Tower by 1.48%.
Retailer Hallenstein Glasson was the only gainer among the stocks listed under the NZX 50 index in Tuesday's early trading on the New Zealand share market.
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