NZX slips on European debt worries

File photo / Kenny Rodger

New Zealand share prices were soft in the morning session but trade was subdued relative to many European share markets, which fell sharply overnight due to ongoing sovereign debt concerns and on the prospect of political uncertainty in Germany.

By noon the NZX 50 index was down by 23.22 points (0.7 per cent) at 3,269.9, following on from a 10-point decline on Monday.

"We are are hanging in there,'' Mint Asset management portfolio manager Shane Solly said.

"It comes back to the fact that we don't face the same fiscal or financial issues in New Zealand and Australia that the Europeans and the Americans do, which is a good start point,'' he said.

Leading stocks were only slightly weaker. Fletcher Building dropped 7c to $7.51, Telcom fell 2c to $2.38 and Contact eased by 5c to $5.27.

European stocks dropped by 4 percent on Monday, led by many of the big banks, as fears for the future of the euro zone continued to mount.

A regional election loss for Germany's ruling Christian Democrats party cast doubt on the euro zone's ability to tackle its debt crisis. Most Asian markets were also sharply lower.

US markets were closed on Monday for the Labor Day holiday, but concerns remain about the world's biggest economy after data showed last week showed US jobs growth had come to an abrupt halt in August.

Across the Tasman, the All Ordinaries index fell 61.2 points, or 1.4 per cent, to 4,321.5 points, on Monday. Australian markets reopen at midday NZT.