NZ stocks teeter on bear market after big drop on Wall St

Bear territory: NZ share prices opened lower after another bad day on Wall Street. Photo / Carol Atkinson

New Zealand share prices opened lower after another big drop on Wall Street, with the local index edging closer towards bear market territory.

By late morning, the S&P/NZX50 index had dropped 179 points or 1.6 per cent to 11,080.

US stocks had suffered their sharpest fall since the start of the Covid-19 pandemic as weak results undermined confidence in the main consumer stocks.

The benchmark S&P 500 share index fell 4 per cent, its biggest loss since June 2020, with 98 per cent of stocks in the index declining.

Craigs Investment Partners head of private wealth research, Mark Lister, said it was a typically muted response to a dramatic fall on offshore markets.

"The New Zealand market is a more defensive market.

"It's lower risk than the US market and in particular the Nasdaq - the growth and technology heavy index.

"It's unsurprising that while we have fallen on the back of volatility offshore, we are holding up much better than those international indices.

"While we are not immune from that volatility and weakness, we are a little more insulated because of the makeup of our market.

"It's not a great day but at least we are holding up better than others."

At today's level, the S&P/NZX50 index is down 18.3 per cent from its record high of 13,558 - set in early January 2021.

A drop of 20 per cent or more is considered to be a bear market.

Salt Funds managing director Matthew Goodson said today's local decline was on light volume after a major "risk off" night in the US.

He said based on futures trading, it appeared the Australian market would be in for a 1.5 to 2 per cent decline when it opens later today.