KEY POINTS:
The sharemarket dived 1 per cent today but performed better than Australia whose banking stocks was shaken by interest rate concerns.
The NZSX-50 benchmark index closed down 39.47 points to 3572.93, recovering slightly near the end of the session on mild turnover worth about $91.7 million. Falls outnumbered rises 86 to 31.
"Essentially, sentiment is being affected by Australia," First NZ Capital Barry Lindsay said.
"Its [the Australian market] been shaken by the Reserve Bank of Australia suggesting further interest rate increases are likely, which is seen as a negative strategy to be following at the current time."
Almost all the leading stocks were down, with Fletcher Building touching a 15-month low of 912, although it rebounded to 919, down 33c on turnover worth $7.5 million.
The drop was "significant and concerning," Mr Lindsay said. "Reason why is, of course, it drives more than 30 per cent of its earnings in Australia."
Fisher & Paykel Healthcare slumped to a three-year low of 275, closing at 278, off 7c, as it continued to be buffeted by the strong New Zealand dollar.
Telecom closed flat at 395 after touching a year low of 390 on $29 million worth of shares traded. The stock fell 3.6 per cent after reporting a 25 per cent drop in second-quarter profit on Friday.
Contact Energy lost 14c to 765, bringing a halt to a bullish run based on rising power prices.
AMP Office was the most traded stock, down a cent to 114 on 18.2 million stocks worth $20.8 million.
Transport firm Freightways fell 4c to 315 after reporting that costs had eaten into its 12 per cent rise in half year revenue, leaving after-tax net profit up just 2 per cent.
Other movers included Auckland Airport down 4c to 257, F&P Appliances down 7c to 287, Pumpkin Patch down 10c to 223, NZ Refining up 17c to 750, and Steel & Tube down 11c to 379.
Dual-listed stocks hit hard included Westpac down 87c to 2750 but ANZ jumped 20c to 2919.
Australian shares had lost 2.2 per cent by mid-afternoon as investors sold banking stocks after the Reserve Bank of Australia raised its inflation forecasts, increasing the chance of more interest rate increases.
The benchmark S&P/ASX 200 index fell 123.9 points to 5,534.1 by 0249 GMT (3.49pm NZT), adding to last week's 3.2 per cent fall.
Wall St continued on its jittery way on Friday, with the Dow Jones industrial average falling 102.75 points or 0.84 per cent to 12,144.25.
Investors sold shares in financial, home building and other credit-sensitive sectors as the US investment-grade credit derivative index widened to a record.
Analysts said US credit protection costs were surging on rumours that some structured credit vehicles with heavy losses are being liquidated.
The Nasdaq Composite Index was down 2.60 points, or 0.11 per cent, at 2,290.43.
- NZPA
