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NZ Sharemarket Falls In Wake Of Tumbling US Equities

Fuseworks Media
Fuseworks Media

Wellington, July 8 NZPA - The New Zealand sharemarket headed south early, in the wake of tumbling equities in the United States.

US stocks fell to their lowest level in 10 weeks as talk of a second government stimulus plan heightened fears that the economy is not yet on the path to recovery and that the corporate earnings season starting this week will be weak.

In this country, leading shares wobbled early with Telecom down 2c to 268, Fletcher Building losing 6c to 635 and Contact Energy dropping 4c to 561.

Around 10.15am the benchmark NZSX-50 index was down 15.09 points to 2731.14, having yesterday edged up 3.3 points in a market that lacked direction.

Among the shares falling early, Sky TV lost 4c to 401, Port of Tauranga dropped 4c to 605, Hellaby Holdings was down 4c to 110, Ebos Group was down 4c to 540, and NZ Oil & Gas was down 3c to 153.

The few shares to gain early included Air New Zealand, up 2c to 89, and Sanford up 2c to 530.

In the US, a member of the Obama administration's economic advisory panel said the US should plan to possibly provide a second round of stimulus funds to prop up the economy. The comments come as investors question earlier optimism for a quick recovery, which had driven stocks as much as 40 percent higher since early March.

"It's clear that over the last three plus weeks that investors are becoming concerned that the recovery in the economy will not come as soon as expected and will not be as strong as expected," said Hugh Johnson, chief investment officer of Johnson Illington Advisors in Albany, New York.

The Dow Jones industrial average dropped 1.9 percent to 8163.60, the Standard & Poor's 500 Index fell 2 percent to 881.03, and the Nasdaq Composite Index lost 2.3 percent to 1746.17.

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