RTTNews - The New Zealand share market opened lower on Thursday, following a weak overnight performance from the Wall Street where U.S. stocks closed moderately lower after the release of disappointing data on service sector activity.
The benchmark NZX 50 index was down 20.58 points or 0.67% to 3,063.48 shortly after the market opened for the day, while the broader NZX All Capital index declined 16.47 points or 0.53% to 3,114.52.
New Zealand's market posted modest losses on Wednesday. The benchmark NZX-50 index declined 8.73 points or 0.28 percent to close at 3,084.07. The New Zealand Stock Exchange reported trading volume of 51.2 million shares valued at NZ$141.1 million.
Overseas, U.S. stocks finished Wednesday's session moderately lower after disappointing data on the health of the service sector and the labor market generated some selling pressure. The major averages all closed in negative territory, offsetting some of their recent gains.
Prompting some negative sentiment in the markets was a report from the Institute for Supply Management on activity in the service sector in the month of July, which showed that the pace of contraction in the sector unexpectedly accelerated from the previous month.
A separate report released by payroll processor Automatic Data Processing (ADP) showed that private sector employment saw another notable decline in the month of July, although the pace of job losses slowed to its slowest rate since October of 2008.
ADP said non-farm private employment fell by 371,000 jobs in July following a revised decrease of 463,000 jobs in June. Economists had been expecting a decrease of about 350,000 jobs compared to the loss of 473,000 jobs originally reported for the previous month.
Meanwhile, the U.S. Commerce Department revealed that factory orders rose 0.4 percent in June, surprising economists, who had expected orders to drop 0.8 percent.
On the earnings front, traders reacted to a mixed bag of earnings, with Procter & Gamble (PG), Kraft Foods (KFT), Ralph Lauren (RL) and Electronic Arts (ERTS) largely beating bottom line estimates while falling short on the revenue front.
The major U.S. averages saw a late session recovery attempt fizzle, leading to a negative finish. The Dow closed down by 39.22 points or 0.4 percent at 9,280.97, the Nasdaq slipped by 18.26 points or 0.9 percent to 1,993.05 and the S&P 500 fell by 2.93 points or 0.3 percent to 1,002.72.
Crude oil prices turned modestly higher Wednesday on the New York Mercantile Exchange as optimism over an economy recovery outweighed Energy Information Administration data showing another increase in weekly supplies. Light sweet crude crude oil rose to $71.97 per barrel, up 55 cents on the session. Prices had earlier dipped as low as $69.71.
U.S. commercial crude oil inventories increased by 1.7 million barrels from the previous week. At 349.5 million barrels, U.S. crude oil inventories are above the upper boundary of the average range for this time of year. Economists forecast an increase of 1.5 million barrels.
On the currency front, the New Zealand dollar was buying US67.39c by about 8 am on Thursday, after touching a high of around US67.60c shortly before midnight.
In the economic news for Thursday, Statistics NZ releases its data on the rate unemployment for the second quarter at 22;45 PM GMT.
In the early trading on the New Zealand stock market on Thursday, market leader Telecom declined 0.70%, as second ranked Contact Energy fell 1.06% and Fletcher Building, the third best stock, slumped 1.34%.
In the retail sector, Hallenstein Glasson, jewelry retailer Michael Hill International and Pumpkin Patch remained unchanged, as Warehouse dropped 0.99%. Among energy stocks, TrustPower slipped 0.65%, as Vector remained unchanged.
Among the dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged on Thursday morning.
Among other notable stocks Infratil and Methven remained unchanged, as Mainfreight fell 0.82%, Nuplex lost 1.00%, Sky City fell 1.81%, Sky Network Television gave up 0.65% and Steel & Tube Holdings surged 3.13%. While Fisher & Paykel Appliances remained unchanged, Fisher & Paykel Healthcare lost 1.25%.
The losers on Thursday morning included-- Air New Zealand by 0.87%, Cavalier by 0.83%, Guinness Peat Group by 4.91%, Kiwi Income Property Trust by 1.00%, New Zealand Refining Company by 0.43%, Pike River Coal by 0.85%, Rakon by 0.72%, Tourism Holdings by 3.28% and Tower by 1.12%.
The major gainers in the day's early trading included-- AMP NZ Office Trust by 1.28%, New Zealand Oil & Gas by 0.61%, NZ Farming Systems by 1.92%, PGG Wrightson by 1.09%, Ryman Healthcare by 0.54% and Skellerup Holdings by 3.64%.
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