NZ stocks: Market in fourth straight loss

The sharemarket fell sharply today in concert with Wall Street as the market tumbled for its fourth straight session.

"It seems to be indiscriminate and on light volume suggesting that it's the retail shareholder base," said Goldman Sachs JBWere broker Joe Gallagher.

The benchmark NZSX-50 index was down 48.55 points at 3240.42 at 11.35am. The market is down 3 per cent from last Friday and is at its lowest since mid-June.

"Hellaby's had a result that was a bit soft yesterday and people are extrapolating that across the market, rightly or wrongly," said Forsyth Barr broker Richard Burton.

The US market was off 1.3 per cent and bearish sentiment had flowed through.

Mr Burton said the market was now trading at a 10 per cent discount to valuation after being at just a 1 per cent discount a month ago.

"The market got over-priced, now it is getting under-priced."

Mr Burton said headlines about the prospect of birdflu disrupting the country were not behind the market's slump.

"Birdflu may have had a little bit of effect but I don't think that's the driver."

"There is concern about inflation and there is concern about interest rate rise between here and Christmas."

Mr Gallagher said what was happening was a "genuine correction".

"This equity market for the year has been incredibly strong and arguably without a lot of fundamental reasoning for it. You are seeing some of the excess come out of it."

He said the potential for an interest rate rise was a big factor in the market's fall.

"There are some definite signs that this economy is slowing and potentially an interest rate rise now, to curb oil price-inspired inflation, may push the economy weaker than it was already heading.

Of the leading three stocks, Telecom was down 8c to 576, Contact Energy was down 14c to 669 and Fletcher Building down 12c to 755.

Retail and manufacturing investor Hellaby Holdings continued to plunge following a profit warning yesterday. It fell another 25c to 475 after shedding 40c, or 7.41 per cent, yesterday. Other retailer stocks were hit with Pumpkin Patch down 19c to 300, Hallenstein Glasson down 16c to 460 and The Warehouse down 9c to 391.

Port of Tauranga was down 15c to 400 and TV 12c to 603.

Lion Nathan, whose takeover bid for Coopers Brewery is seen as doomed, was down 17c to 839.

Juice company Charlies fell 1.7c , or 11.6 per cent, to 12.9c after its proposal to takeover juice company Arano for undisclosed reasons fell through.

- NZPA