MARKET CLOSE: NZX 50 Falls a Second Day
Dec. 2 – New Zealand stocks fell, sending the NZX 50 Index lower for a second day, as concern about a deep global recession drove down equity markets worldwide.
The NZX 50 fell 31.78, or 1.2%, to 2651.14. Within the index, 29 stocks fell, 12 rose and nine were unchanged. Warehouse Group led shares lower, falling 6.7% to NZ$3.22. Skellerup Holdings fell 6.5% to 72 cents and Tourism Holdings fell 5.6% to 68 cents.
Stocks across Asia fell today on concern weakening economic growth will sap demand and erode corporate profits. The S&P/ASX 200 Index dropped 3.5% to 3552.9 in late afternoon trading, even after the central bank cut its benchmark interest rate by 100 basis points to 4.25%.
Woodside Petroleum and BHP Billiton were among commodity companies that fell as prices of raw materials and crude oil dropped. The Nikkei 225 Index fell about 5% to 7978.03 in mid-day trading.
“If you’ve got money and a long-term outlook you can still go for growth industries, there’s some wonderful bargains, but there’s too much pessimism about,” said Stephen Wright, private client adviser at ASB Securities.
Turnover was a paltry NZ$53 million, about half the average of more normal times, as volatility kept many investors out of the market.
Trading on the NZX slumped 25% last month as the global financial rout eroded demand for stocks, the exchange said in a statement today. The total value of trade fell 57% to NZ$1.4 billion in November from the same month of 2007 and the daily average traded dropped 53% to NZ$72 million.
New Zealand Oil & Gas fell 3.1% to NZ$1.26 as prospects of a prolonged global economic slump drove the price of crude oil to a three year low. Crude for January delivery dropped 1.7% to US$48.44 a barrel.
Telecom Corp. rose 0.4% to NZ$2.34 after the company scotched reports it has been approached by Pacnet with an offer of US$420 million for its AAPT unit in Australia.
The report is "purely speculative" and Telecom remains committed to AAPT, spokesman Mark Watts told BusinessWire.
Delegat’s Group rose 0.5% to NZ$2.01 after the winemaker that controls the Oyster Bay wine brand, said profit may rise 29% this year amid demand for its products in export markets. “The group continues to experience strong trading conditions,” managing director Jim Delegat told shareholders today.