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NZ Sharemarket Heads Down Again As Wall Street Drops Again

Fuseworks Media
Fuseworks Media

Wellington, June 18 NZPA - The sharemarket was again near a 27-month low today after Wall Street fell again.

US stocks were dragged down by financial shares after brokerage Goldman Sachs warned that US banks would have to raise as much as $US65 billion ($NZ87 billion) in capital to shore up balance sheets hit by the mortgage crisis.

Here the NZSX-50 index was down 10 points to 3394 at 10.20am. The index yesterday hit a 17-year low of 3377.5.

Brokers said turnover has dried up as investors desert the market in the face of a stack of bearish factors. Turnover this morning was a miserable $5m.

The top two stocks were down a couple of cents, with Telecom on 382 and Contact Energy on 836.

Third-ranked Fletcher Building, which yesterday hit a three-year low of 658 but recovered at the close, rose another 5c to 680.

Fletcher has halved in value since July as investors fret about the housing and construction market in New Zealand and the United States, where it has recently increased its exposure. But analysts believe it has been oversold and a good backlog of infrastructure works will insulate it from the housing market.

Dominion Finance, which yesterday said it might have to halt debenture withdrawals from its finance firms, was suspended until the end of trading today. Its shares have plunged from 268 in May last year to 50c.

NZ Finance copped fallout today, with its share price plunging 7c, or 15 percent, to 38c.

Among other top 50 stocks to fall, Hallenstein Glasson was down 10c to 285, The Warehouse 10c to 500, Sanford 4c to 519, Port of Tauranga 4c to 678 and Vector 3c to 201.

Among the few risers were Methven, up 5c to 170 and PGG Wrightson, up 2c to 255.

In the US, the Dow Jones industrial average slid 108.78 points, or 0.89 percent, to end unofficially at 12,160.30. The Standard & Poor's 500 Index shed 9.21 points, or 0.68 percent, to close unofficially at 1350.93. The Nasdaq Composite Index fell 17.05 points, or 0.69 percent, to close unofficially at 2457.73.

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