NZ share prices open weaker after sharp fall on Wall St

NZ share prices fell after a bad day on Wall Street. Photo / File

The New Zealand sharemarket dropped by 1 per cent in morning trade after nervousness about US tech sector earnings drove Wall Street share prices sharply lower.

By midday, the S&P/NZX50 index was down 114 points at 11,698.

US tech stocks were sharply weaker, pushing the Nasdaq Composite index down by 3.95 per cent to its lowest level in more than a year.

The broader S&P index was 2.8 per cent down.

At today's level, the New Zealand sharemarket is 13 per cent down from its January 2021 record high of 13,558.2.

Shares in Alphabet - which owns Google - fell more than 6 per cent after the company said its earnings had slipped in the first quarter of 2022.

Alphabet's revenue grew 23 per cent to US$68 billion ($103.4b) in the three months, slightly below forecasts for US$68.1 billion but its net profit fell by 8 per cent to US$16.4b.

"As is always the case, we hold up better here in these volatile times because we have a lower risk market," Craigs Investment Partners' head of private wealth research, Mark Lister, said.

The issues driving the markets were the same as they have been all year, mostly concerning inflation.

"People are coming around, belatedly, to the realisation that inflation is going to be stubbornly high and that central banks are going to have to raise interest rates quickly and more aggressively than people recognised," Lister said.

"That's going to put the brakes on terms of economic growth and for company earnings," he said.

"I think the volatility will be with us for a while," he said, adding the US tech stocks had been "belted".

"They are good businesses but they simply became overpriced and have had too much of a run up."