Sharemarket slumps as NZOG falls 30 per cent

File photo / Paul Estcourt

Shares in New Zealand Oil & Gas plummeted to a five-year low after a trading halt was lifted yesterday afternoon, following the explosion at the Pike River Coal mine on the West Coast on Friday, which has left 29 men unaccounted for.

Gloom pervaded the New Zealand sharemarket yesterday, with just three stocks notching up gains.

The NZX-50 index closed down 37.86 points, or 1.1 per cent, at 3258.77, after gaining 28.5 points on Monday. The index peaked at a seven-month high around 3344 on November 10.

When the trading halt was lifted just after 1pm yesterday, NZOG shares fell more than 30 per cent to a five-year low of 80c, before recovering slightly to close down 27.5 per cent, or 33c, at 87c.

NZOG is a 29.4 per cent shareholder in Pike River Coal Ltd, and the blast and suspension in mine operations have implications for the company.

However, NZOG said its key assets were in oil and gas exploration, and cash.

Pike River Coal shares remained in a trading halt at the request of the company, which considered it appropriate to focus on assessing the event and rescuing its employees rather than any concern about a lack of information in the market. Pike River's suspension will remain in place until a detailed update can be given to the market.

Rescue teams are still waiting to go into the mine, where there has been no communication with the men for nearly six days.

Elsewhere on the market, Fletcher Building lost 5c to $8, Contact Energy fell 7c to $5.90, Telecom was down a cent at $2.17 and Vector was down 8c at $2.45. Among the bigger declines, clothing retailer Hallenstein Glasson fell 14c to $4.46, Steel & Tube was down 12c at $2.05, and Goodman Fielder was off 8c at $1.77.

The stocks to rise were Telstra, up 13c at $3.50, casino operator Sky City, up 2c at $3.19, and Property for Industry, 1c higher at $1.15.

Across the Tasman, Australia's S&P/ASX 200 Index shed more than 1 per cent, or 55 points, to 4588.

Earlier, stocks in the United States had steep intraday losses, but then recovered after Ireland's prime minister said he would call for the dissolution of the country's government after a budget vote next month.

US bank stocks led falls after the FBI raided the offices of two hedge funds as part of a broad insider trading investigation.

- NZPA