RTTNews - The New Zealand share market opened moderately weaker on Tuesday, following a strong negative overnight lead from Wall Street where traders were in a selling mood on continued world economic recovery worries.
The benchmark NZX 50 index was down 18.63 points or 0.67% to 2,776.27 shortly after the market opened for the day, while the broader NZX All Capital index fell 18.51 points or 0.65% to 2,836.16.
New Zealand stocks rose modestly on Monday. The benchmark NZX-50 index advanced 10.6 points or 0.38 percent to 2,794.9. The New Zealand Stock Exchange reported trading volume of 53 million shares valued at NZ$73.6 million. There were 29 stocks closing higher, while 34 were lower and 44 unchanged.
Overseas, U.S. stocks kicked off the week with a disappointing outing on Monday, as traders expressed renewed concerns about the economic outlook ahead of the release of key figures later this week. The major averages all finished firmly in negative territory, extending their recent weakness.
The day's pullback was largely sparked by news that the World Bank cut its forecast for the global economy and warned of a large decline in international capital flows amidst financial market fragility.
The World Bank said it now expects the world economy to shrink by 2.9 percent this year, larger than its earlier prediction of a 1.7 percent decrease.
Meanwhile, the Federal Reserve continued its treasury buyback program Monday, completing its first quantitative easing move of the week. The New York Federal Reserve purchased $7.5 billion worth of securities with maturity dates ranging from December of 2013 to April of 2016.
The day's buyback saw a total of $20.74 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $177.47 billion since the program began on March 25th.
In other news, President Barack Obama announced an agreement with the pharmaceutical industry that aims to reduce Medicare drug costs. Separately, the president signed a bill that allows the Food and Drug Administration to regulate tobacco products.
All the major U.S. indices closed sharply lower, accelerating their slide in late trading. The Dow finished down by 200.72 points or 2.4 percent at 8,339.01, the Nasdaq fell by 61.28 points or 3.4 percent to 1,766.19 and the S&P 500 dropped 28.19 points or 3.1 percent to 893.04.
Crude oil plunged Monday on the New York Mercantile Exchange as the World Bank's discouraging economic forecast led to worries over energy demand. The drop took crude to its lowest close in 19 days.
Light sweet crude fell to $66.93, a drop of $2.62 for the session. Prices hit as low as $66.25. While the July contract expired at the end of the session, the more-actively traded August crude contract fell $2.52 to $67.50 per barrel.
On the currency front, the New Zealand dollar dropped overnight against the US dollar and was buying US63.10c by 8am on Tuesday, compared to US63.95c at 5pm on Monday.
In the early trading on the New Zealand stock market on Tuesday, market leader Telecom eased 0.38%, as second ranked Contact Energy fell 1.37% and Fletcher Building, the third best stock, dropped 2.11%.
In the retail sector, Hallenstein Glasson and jewelry retailer Michael Hill International remained unchanged, as Pumpkin Patch surged 3.23% and Warehouse declined 0.53%.
In the energy sector, Vector gave up 0.49%, as TrustPower remained unchanged in the early trading on Tuesday.
Among the dual listed issues, AMP, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged in the day's early trading, as Australia and NZ Banking Corp posted a loss of 1.93%.
Among other notable stocks, Infratil gave up 0.55%, Mainfreight slumped 1.10%, Methven dropped 1.43%, Nuplex declined 1.86%, Sky City slipped 0.72% and Sky Network Television fell 1.15%, as Steel & Tube Holdings remained unchanged. Fisher & Paykel Appliances remained on the unchanged line, while Fisher & Paykel Healthcare dipped 1.04%.
Apart from Pumpkin Patch, the only other gainer among stocks listed under the NZX 50 index on Tuesday morning was Rakon Limited, which added 1.94% in the early trading.
The major losers in the day's early trading included- Air New Zealand by 1.09%, Ebos Group by 1.90%, Guinness Peat Group by 1.45%, Kiwi Income Property Trust by 1.10%, New Zealand Oil & Gas by 3.80%, Pike River Coal by 3.48%, Port of Tauranga by 0.67% and Ryman Healthcare by 0.62%.
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