NZ Shares: Market down early in wake of tumbling US

The New Zealand sharemarket fell early, following stocks in the United States which tumbled on concerns that the Federal Reserve's latest efforts to stem the US recession are too costly and untested.

Minutes after the market opened today, NZX announced that a trading halt for resins and chemical maker Nuplex would be extended pending an announcement from the company.

On Monday Nuplex said it was planning to raise $110 million of new capital to reduce debt under an agreement with its banks.

Initially the trading halt was to be in place until the close of trading on Tuesday, but on Wednesday morning the halt was extended to the close of trading yesterday.

Around 10.15am the benchmark NZX-50 index was down 12.85 points to 2620.36, after a 26.9-point rise yesterday.

A 9c fall in leading stock Telecom, taking the stock to $2.36 after a 5c rise yesterday, helped drag the market down.

Dual-listed Lion Nathan fell 25c early to $9.75, while Rakon dropped 4c to $1.23, Contact Energy was down 3c to $6.01, and Fisher & Paykel Healthcare slipped 2c to $3.18.

NZ Oil & Gas was up 2c to $1.39, while NZ Farming Systems Uruguay picked up 7c to 77 on small volume.

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In the US, investors were unsettled by the implications of the Fed's action to pump another US$1 trillion ($1.8 trillion) into the financial system and a plan to expand its consumer and small business lending programme, fearing the moves could stir up inflation in the long term.

The Dow Jones industrial average fell 1.2 per cent to 7400.80, the Standard & Poor's 500 Index lost 1.3 per cent to 784.04, and the Nasdaq Composite Index shed 0.5 per cent to 1483.48.

- NZPA