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The sharemarket continued to fall heavily in early trading in the wake of yesterday's decision by the Reserve Bank to hike interest rates.
An 8.4 per cent plunge in The Warehouse after the decision of the Commerce Commission to decline permission for Woolworths or Foodstuffs to make takeover bids did not help sentiment. Warehouse shares plunged 55c to 600 in the first minutes of trading.
The Warehouse rose 39c, or 6.3 per cent, yesterday on heavy turnover worth $9.3m after newspapers reported Woolworths had agreed to offer 715 a share for the company, valuing it at $2.2 billion.
The commission said a takeover by either supermarket group would lessen competition.
The benchmark NZSX-50, which fell over 1 per cent yesteday after the Reserve Bank hiked interest rates, was down 32.10 points, 0.8 per cent, to 4302.53 at 10.10am.
The local market took its lead from the US where stocks tumbled as Treasury bond yields surged above 5 per cent, reinforcing fears that global inflation would force borrowing costs to rise.
Shares of companies that pay high dividends, particularly utilities, fell as they faced stiffer competition from bonds. Stocks of companies sensitive to rising borrowing costs such as home builders and banks were among the worst-performing sectors.
On the local market, it was a sea of red down arrows on the top 50 screen with Pumpkin Patch, up 2c to 397, the only green arrow.
Turnover was light at 4.6m, valued at $18m.
Telecom was down 4c to 468 after it announced it would spend $300 million improving its mobile network.
Contact Energy fell 8c to 870, Fletcher Building 12c to 1258, Ryman 5c to 240, Kiwi Income Trust 8c to 150 and Michael Hill 9c to 930.
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On Wall Street, the Dow Jones industrial average slid 198.94 points, or 1.48 per cent, to end at 13,266.73, with all 30 Dow components finishing in the red.
The Standard & Poor's 500 Index lost 26.66 points, or 1.76 per cent, to finish at 1,490.72 and the Nasdaq Composite Index dropped 45.80 points, or 1.77 per cent, to close at 2,541.38. The three benchmark indexes suffered their biggest one-day percentage losses since March 13.
- NZPA