KEY POINTS:
The New Zealand sharemarket fell 1.3 per cent today as the United States government tried to calm markets over new troubles in the mortgage market.
The NZSX-50 index dropped 41.44 points to 3080.10 on a slightly higher than normal Monday turnover worth $94 million.
New Zealand was being keenly watched as the first market to open after the US government moved to alleviate fears that mortgage giants Fannie Mae and Freddie Mac did not have enough capital.
James Smalley, a client adviser with Hamilton, Hindin, Greene, said developments over the weekend had lent some support to those companies "and maybe that's why we've been down but nothing serious, no panic selling".
Blue-chip stocks were soggy, with Telecom down 7c to 332, Fletcher Building off 13c to 625 and Contact 20c lower to 740.
Fisher & Paykel Healthcare was off 5c to 230, Auckland Airport fell 4c to 190, Mainfreight was off 8c to 632 and NZ Refining was off a mighty 39c or 5 per cent to 651.
Mr Smalley said the refining stock had succumbed to a bout of profit-taking as it recovered from a big selldown by one investor.
Today's "ray of sunshine" had been oil company NZOG, which rose nearly 6 per cent or 10c to 180.
Investors might be looking at it as a "safe haven," Mr Smalley noted.
Other risers were NZOG interest Pike River Coal up 12c to 216, F&P Appliances up 3c to 195, and SkyCity up 2c to 302 as it confirmed its earlier profit guidance.
Retailer The Warehouse fell 14c on gloomy May retail sales figures, but other retailers were flat or only slightly lower and Hallenstein Glasson rose 6c to 263, the inference being that all the bad news was already out, Mr Smalley said.
He said retail stocks had already been "smashed" and couldn't go much lower.
But with the prospect of an interest rate nearing, Mr Smalley said the market might well entice risk-tolerant investors who still sought good yields.
Smaller stocks included Ebos down 30c or 6.6 per cent to 420 on light volume and Mr Chips down 15c or 5 per cent to 275 after the chip maker received a full takeover offer on Friday. The stock jumped 14c to a recover high of $2.90 on Friday.
In Australia shares were down 1.1 per cent in late trading on worries about the impact of financial sector woes and high oil prices on economic growth.
Friday's "nightmare on Wall St" saw the Dow Jones industrial average closed down 1.14 per cent, to 11,100.54. The Standard & Poor's 500 Index slid 1.11 per cent, to 1239.49. The Nasdaq Composite Index dropped 0.83 per cent, to 2239.08.
- NZPA