NZ shares slide 1.4pc in wake of Japanese chaos

File photo / NZ Herald

The New Zealand sharemarket plunged to a two-month low yesterday amid aggressive selling on world markets after the Japanese Prime Minister raised the spectre of a nuclear disaster in the wake of several explosions at a power plant on the tsunami-hit northeast coast.

Tokyo's Nikkei share average fell 14 per cent in quick order late yesterday afternoon after Prime Minister Naoto Kan said radiation levels had become high near Fukushima Daiichi nuclear plant, 240km north of Tokyo, and the risk of further leakage was rising.

The NZX-50 index closed down 47.06 points, or 1.4 per cent, at 3314.14, after losing 21.6 points on Monday.

Investors had every right to be concerned, although fear and greed were driving more speculative investors to seek liquidity which had accelerated the market decline, Nigel Scott, of Craigs Investment Partners, said.

"The bottom line is the market's probably reacting to the environment of what status those nuclear reactors are at this point in time."

The sharemarket had seen uncertainty since the middle of last week when the Reserve Bank cut the official cash rate but had been slowly recovering before the market ructions.

Among top stocks, Air New Zealand lost 11 per cent, or 13c, to $1.06 after the majority Government-owned airline said it no longer expected to be profitable in the second half. Last month, Air NZ said it expected to make a profit in the six-month period but yesterday said the financial impact of the Christchurch earthquake was more severe than expected, and the Japanese disaster would hit revenue.

Just three shares closed higher on the top-50 - Argosy Property, up 1c at 71c, Hallenstein Glasson up 1c at $3.64, and Steel & Tube up 1c at $2.51.

Fletcher Building was down 9c at $8.66, Telecom lost 1c to $1.97, Contact Energy was down 11c at $5.83, Auckland Airport fell 5c to $2.17 and SkyCity lost 2c to $3.38.

Insurer Tower fell 8c to $1.71, Sky TV was down 7c at $5.39, and Mainfreight fell 10c to $8.65.

Dual-listed stocks were also hit, with ANZ down 91c at $30.54, Westpac off 45c at $30.75 and Telstra down 4c at $3.56.

Australia's S&P/ASX 200 Index was down 2 per cent at 4528.

In the United States, concerns over the economic impact of the Japanese earthquake and tsunami led to a broad sell-off in the stockmarket.

- NZPA