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NZ Sharemarket Closes Low

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Jan 25 NZPA - The New Zealand sharemarket closed low today as US President Barack Obama's announcement to limit bank risk-taking last week continues to have a ripple effect on the global market.

The benchmark NZX-50 index closed down 1.772 points, or 0.056 percent, at 3188.657.

Though New Zealand's market has been affected by Wall Street woes, Grant Williamson, director of Hamilton, Hindin and Greene, said the local market had remained resilient, only down a fraction.

"We are not following it too closely," he said. "We are just keeping an eye on what is happening overseas, but performing better than what most investors would have expected today."

"I think most investors locally are just buying time as we wait for the reporting season to kick-off in February. There is really a lack of domestic news to influence our prices at the moment."

Wellington's holiday today also caused a less-active market, and tomorrow's Australia Day will also result in another quiet day, "all in all it's going to be a slow start for this week", Mr Williamson said.

Among leading shares Fletcher Building was up 5c to 802, Contact Energy rose 5c to 605 and Telecom was down 2c to 239.

Rising stocks included Hellaby Holdings with 4c to 170, Goodman Property 2c to 103 and Fletcher Building Limited with 5c to 802.

In negative territory, Fisher & Paykel Healthcare fell 2c to 330, Piker River Coal declined 1c to 100, after a slight rise to 103 this morning, and New Zealand Oil and Gas fell 2c to 158.

The negative start to the week came after Wall Street closed last week with a second day of heavy falls, after Mr Obama's announcement and was intensified on Friday with uncertainty over the pending confirmation vote for Federal Reserve chairman Ben Bernanke to a second term.

In addition, the election victory earlier in the week of Republican Scott Brown in Massachusetts for the US Senate seat of the late Edward Kennedy, costing Democrats their sure-fire majority, also added to the sense of uncertainty.

"Between uncertainty over Bernanke, Obama's bank regulation proposal and the election in Massachusetts, the market is like a cork in the water and the Democrats just hit the flush," Jack Ablin, chief investment officer at Harris Private Bank in Chicago, told Reuters.

The Dow fell 216.90 points, or 2.09 percent, to 10,172.98 while the broader Standard & Poor's 500 index fell slid 24.72 points, or 2.21 percent, to 1,091.76. The Nasdaq Composite Index fell 60.41 points, or 2.67 percent, to 2,205.29.

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