KEY POINTS:
The New Zealand sharemarket tanked today on worries about the wider economic outlook rather than just the meltdown of the US and European financial sectors.
The NZX-50 index closed down 103.162 points, or 3.273 per cent, at 3048.377. There were 75 falls and 22 rises. The Australian market was also down 3.8 per cent to a three-year low in afternoon trading.
Brokers said the New Zealand market's fall was on very low volume. Buyers had taken to the sidelines so sellers had to accept lower prices.
"It is just like the Christmas period," said Stephen Wright at ASB Securities said about the volume traded. Stocks worth just $50.4m traded today.
Last week the US$700 billion ($1.05 trillion) bailout of the US finance sector got through but investors are now worrying about the poor state of the US economy and European banks.
"The market seems to have focused more on the economic outlook. It is the beginning of the reporting season over in the US," said Mr Wright.
Treasury's report today on the state of the New Zealand economy ahead of the election added to the bleakness. Treasury said the economic outlook had deteriorated badly since the May budget.
Most stocks were hit but some took harder hits than others like investment company GPG, down 8c, or 6.5 per cent, to 115 and Michael Hill International, down 5c at 72.
Telecom fell 10c, or 3.46 per cent, to 276 and Fletcher Building was down 33c to 650. Contact eased 21 to 740.
The lower New Zealand dollar did not help exporters. Sanford fell 30c to 545.
Financial stocks were again on the receiving end with Westpac falling 4.96 per cent to 2600 and AMP down 75c to 775. Tower declined 5c at 173.
Mainfreight fell 24c to 616 and Port of Tauranga 20c to 670.
NZ Farming Systems Uruguay was down 5c at 115 but PGG Wrightson rose 5c at 176.
Cavalier eased 5c to 250 and Auckland Airport eased 12c to 190.
In the US, the Dow Jones industrial average fell 157.15 points, or 1.50 per cent, to 10,325.70 on Friday, while the Standard & Poor's 500 Index slid 15.04 points, or 1.35 per cent, to 1099.24. It was the first time the S&P closed below 1100 in almost four years.
The Nasdaq Composite Index was down 29.33 points, or 1.48 per cent, at 1947.39.
- NZPA
