KEY POINTS:
The New Zealand share market plunged 2.3 per cent today as offshore markets weakened and as gains on Friday by major stocks reversed.
"Asian markets started the week in a weak fashion," said Nigel Scott, retail adviser at ABN Amro Craigs.
Many Asian markets were down 2 per cent and the Australian market was down about 1.6 per cent during the New Zealand market's session.
The benchmark NZSX-50 index closed down 84.172 points at 3540.055, reversing all of Friday's 61.1 point rise.
Volume was $232.9 million. Falls outnumbered rises by 65 to 37 among the 139 stocks traded.
Mr Scott said volume was inflated by the reporting of trades from Friday in pre-market crossings.
"There were some MSCI index adjustments on which we saw some pretty strong price appreciation in major stocks on Friday," he said.
The global MSCI stock indices guide institutional trading so weighting changes trigger buying and selling by institutions.
He said some buyers in the larger stocks held back ahead of the reweighting and they re-emerged on Friday.
"Today, the market really reacted to some profit-taking on light volume in some of those stocks," he said.
Telecom fell 20c to 382 after gaining 6c on Friday. Fletcher Building fell 30c to 770 after jumping 22c on Friday.
Contact Energy resumed trading with a 37c, or 4 per cent, increase on Friday and today it retreated 33c to 915. Contact's parent Origin has spurned a takeover offer from BG Group and investors are waiting to see if there are any developments.
Renewed jitters about the financial sector sent Wall Street shares tumbling on Monday. The Dow Jones Industrial Average skidded 136.30 points (1.08 per cent) to 12,502.02.
US sentiment took a hit from a shakeup in top management at US banking giants Wachovia and Washington Mutual along with downbeat notes on the brokerage sector from Standard & Poor's, warning that the crisis in the sector may be far from over.
The Reserve Bank of Australia left interest rates unchanged today, saying a considerable tightening had occurred via the currency.
Analysts are expecting a much more hawkish statement from the Reserve Bank of New Zealand when it makes a statement on Thursday because of the Government's expansionary budget.
Auckland Airport was down 1c to 216, Infratil was down 2c to 221 and Guinness Peat Group was down 3c to 157.
Fisher and Paykel Appliances was unchanged at 233 but the healthcare share eased 9c to 231.
Media company APN was down 4 per cent to 480.
Tower eased 2c to 219, Tourism Holdings 5c to 165 and Sky TV was down 1c to 455.
Bucking the trend was Sanford up 5c at 475, Mainfreight up 4c at 722 and The Warehouse up 4c at 534. Port of Tauranga rose 4c to 668 and Cavalier was up 5c at 265.
- NZPA
