RTTNews - The New Zealand share market opened weaker on Tuesday, following sharp losses on Wall Street overnight where U.S. stocks fell on renewed economic concerns and broadly lower commodity prices.
The benchmark NZX 50 index was down 20.69 points or 0.73% to 2,804.46 shortly after the market opened for the day, while the broader NZX All Capital Index declined 12.68 points or 0.44% to 2,865.93.
New Zealand's market posted a gain to open the trading week on Monday. The benchmark NZX-50 index was up 15.3 points or 0.55 percent at 2,825.16. The New Zealand Stock Exchange reported trading volume of 43.6 million shares valued at NZ$88.4. Advancing issues outnumbered decliners 48 to 32 with 33 unchanged.
Overseas, the U.S. stock markets experienced substantial weakness during trading on Monday after traders there cashed in on recent strength. The major U.S. averages all moved sharply lower, more than offsetting the modest gains posted last week.
After showing a significant decline in morning trading, the major U.S. averages moved roughly sideways in the afternoon, stuck firmly in negative territory. The Dow eventually ended the session down almost 190 points.
The weakness in the markets came as trades did some profit taking following the recent rally, with some disappointing economic data raising concerns that stocks have come too far too fast in light of the near-term economic outlook.
Before the start of trading, the New York Federal Reserve released a report showing that conditions for New York manufacturers have deteriorated at a faster pace in the month of June than in the previous month.
While stocks showed a steep decline in morning trading, however, selling pressure waned over the course of the afternoon. Additionally, it is worth noting that the extent of the downward move may have been exaggerated by below average volume.
In afternoon trading, investors largely shrugged off a report from the National Association of Home Builders showing a deterioration in home-builder confidence in the month of June. The report showed that the National Association of Home Builders/Wells Fargo Housing Market Index fell to a reading of 15 in June from a reading of 16 in May. Economists had been expecting the index to edge up to a reading of 17.
The major U.S. averages all ended the session firmly in negative territory, although off their worst levels of the day. The Dow closed down 187.12 points or 2.1 percent at 8,612.13, the Nasdaq closed down 42.42 points or 2.3 percent at 1,816.38 and the S&P 500 closed down 22.49 points or 2.4 percent at 923.72.
Crude oil dropped on the New York Mercantile Exchange Monday as its hedge appeal was hurt by a stronger dollar. Traders also continued to collect profits from last week's rally to a seven-month high. Light sweet crude oil fell to $70.62, down $1.42 for the session. Earlier, oil hit as low as $69.58.
On the currency front, the New Zealand dollar was buying US63.13c by 8am on Tuesday, after dropping below US62.80c in the earlier trading.
In the early trading on the New Zealand stock market on Tuesday, market leader Telecom slumped 1.08%, as second ranked Contact Energy fell 0.51% and Fletcher Building, the third best stock, dropped 0.88%.
In the retail sector, Hallenstein Glasson and Warehouse remained unchanged, as jewelry retailer Michael Hill International gave up 1.45% and Pumpkin Patch fell 3.03%.
In the energy sector, Vector added 0.98%, as TrustPower remained unchanged in the early trading on Tuesday.
Among the dual listed issues, AMP, APN News & Media, Lion Nathan and Telstra remained unchanged in the day's early trading, while Australia and NZ Banking Corp fell 1.14% and Westpac Bank dropped 1.39%.
Among other notable stocks, Mainfreight, Sky City and Steel & Tube Holdings remained unchanged, as Infratil eased 0.57%, Methven declined 0.72%, Nuplex declined 2.38% and Sky Network Television slipped 0.47%. Fisher & Paykel Appliances dropped 2.82%, as Fisher & Paykel Healthcare added 0.68%.
Apart from Fisher & Paykel Healthcare and Vector, the only other gainer among stocks listed under the NZX 50 index on Tuesday morning was NZX Limited, with the company's stocks posting a gain of 0.65%.
The major losers in the day's early trading included- Air New Zealand by 2.86%, Freightways by 1.00%, Guinness Peat Group by 1.39%, New Zealand Oil & Gas by 1.84%, Pike River Coal by 3.25%, Rakon by 1.25%, Ryman Healthcare by 1.25%, Sanford by 1.75%, Tourism Holdings by 2.13% and Tower by 1.08%.
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