Sharemarket recovering ground slightly after 2pc early plunge

Photo / Kenny Rodger

The New Zealand sharemarket plunged in early trading, losing nearly 2 per cent in the first 15 minutes after opening.

Around 10.15am the benchmark NZX-50 index was down 58.72 points, or 1.9 per cent, to 2971.42, as it caught up with carnage on overseas markets after missing the damage due to yesterday's public holiday.

It has recovered some ground since, and is now down 1.3 per cent, having fallen 39 points to 2990.

Fletcher Building shares are down 13c to $8.05, Telecom shares are down 3c to $1.83, Contact Energy shares are down 3c to $5.78, Sky City is down 3c to $2.87, Auckland International Airport shares are down 3c to $1.84.

Shares in the exchange operator NZX have fallen 7c and are now trading at $1.48 each.

Investors lost confidence in global economic recovery in the wake of poor US jobs data on Friday, along with concerns that Europe's economies are being hit by fiscal austerity measures and even China's boom may be topping out.

Comments from Hungarian officials suggested the country could face a Greek-style debt crisis, although the Hungarian government later stressed that the country was not in the same situation as Greece and would meet budget deficit targets set in an aid deal with the International Monetary Fund and European Union.

The NZX-50 board was a sea of red ink early today, as prices fell for a large majority of shares in the index.

In early trading Nuplex dropped 16c to $2.70, Ebos Group lost 10c to Fisher & Paykel Healthcare lost 7c to $3.10, Trustpower was down 7c to $7.13, The Warehouse lost 6c to $3.50, NZ Oil & Gas was down 5c to $1.35.

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In the US, the S&P 500 fell to its lowest close in seven months, as industrials and technology shares fell and investors stayed on their heels after last week's payrolls figure.

The Dow Jones industrial average fell 1.2 per cent to 9816.49, the Standard & Poor's 500 Index slid 1.4 per cent to 1050.47, and the Nasdaq Composite Index tumbled 2 per cent to 2173.90.

- NZPA