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The sharemarket plunged to its lowest in more than two years, joining other markets in hefty declines after Wall Street set a negative tone.
Record high oil prices and concerns over US economic and corporate health sparked the global equities decline. In New Zealand, a gloomy retail sector and data showing economic contraction played second fiddle today, analysts said.
The benchmark NZSX-50 lost 1.98 per cent, or 65 points, to close at 3226.9, its lowest level since December 2005. During the day, the index hovered just 3 points shy of a three-year low.
Turnover totalled $130.8 million.
"It's a negative day and we're following international markets, and it's just sentiment," said Macquarie Equities senior adviser Ian Witters, who noted investors did not appear to be panicking.
The Warehouse's warning of a marked sales downturn, after yesterday's profit warning from fellow retailer Briscoe Group, added to the dire economic outlook.
Data showing the economy shrank 0.3 per cent in the first quarter looked set to make up the first half of a technical recession, or two consecutive negative quarters.
"I think across the board, people are starting to say the reality is consumer confidence is down and retailers are feeling the brunt of it," Mr Witters said.
"When you get (Briscoe managing director) Rod Duke saying their profits are going to be down 80 per cent, that's a very big number."
Briscoe slashed its first half net profit forecast for the second time, to between $2m and $3m compared with $10.5m a year earlier.
Briscoe shares fell 9c to 90, having earlier hit a record low 89c.
The Warehouse slid 32c to close at 419, recovering slightly from an earlier two-year low of 415, after the company downgraded its profit guidance by 10 per cent.
Among the leaders, Telecom fell 4c to 359, Contact Energy fell 30c, or 3 per cent, to 820, and Fletcher Building lost 5 per cent, or 35c, to 638.
Fisher & Paykel Healthcare fell a cent to 230, F&P Appliances lost 4c to 194, Sky City was down 7c at 308, and Infratil also fell 7c, to a more than two-year low of 184.
Mainfreight lost 18c to 650, Hallenstein Glasson fell 14c to 268, Freightways slid 17c to 299, and Vector lost 9c to 190.
Initially the only top-50 stock to rise, NZ Oil and Gas rose a cent to 170, Kiwi Income Property Trust rose a cent to 121, Skellerup was up 3c at 86, NZX gained 10c to 790, and Port of Tauranga was up 5c at 660.
Dual-listed stocks were also generally negative, with ANZ down 111c at 2325, Westpac off 77c at 2648, AMP down 22c at 848, but Lion Nathan up 9c at 1057.
Australia's benchmark S&P/ASX 200 Index was down 1 per cent at 5244, recovering from an earlier decline of more than 2 per cent, while Japan's Nikkei share average was down 2.5 per cent.
In the US, the Dow slid to a 21-month low as oil rose above US$140 ($186) a barrel, and Wall Street powerhouse Goldman Sachs urged investors to sell bank and car company shares, escalating concern about the outlook for profits.
- NZPA