Asian Economic News
New Zealand Stocks Open Steeply Lower On Wall Street's Negative Lead
10/26/2009 7:38 PM ET
(RTTNews) -
The New Zealand share market opened sharply lower on Tuesday, after continuing economic concerns sent Wall Street lower overnight, with the U.S. markets falling in advance of this week's GDP data.
The benchmark NZX 50 index fell sharply by 33.29 points or 1.04% to 3,181.63 shortly after the market opened for the day. Meanwhile, the broader NZX All Capital index declined steeply by 32.48 points or 1.01% to be at 3,196.01.
New Zealand's market was closed on Monday. When New Zealand stocks last traded on Friday, the benchmark NZX 50 index advanced 13.3 points or 0.4 percent to close at 3,214.9. Trading volume was 43.5 million shares valued at NZ$113.3 million.
Overseas, U.S. stocks saw steep losses on Monday, giving up early gains amid a considerable pullback in the financial and commodity sectors. The major averages all closed firmly in negative territory, backing further away from one-year highs set earlier this month.
The early strength in the U.S. markets came as traders reacted positively to the latest batch of earnings news, including better than expected earnings from Verizon (VZ) and Corning (GLW). An increase in commodities prices also generated some buying interest.
Trader sentiment was also boosted by optimism about the third quarter GDP report due to be released later this week. Economists estimate that the economy expanded by 3.2 percent after contracting in each of the four previous quarters.
Nonetheless, weakness among financial stocks limited the upside for the markets, and a sharp pullback by commodities prices contributed to a substantial downturn by the major averages in late morning trading.
The weakness in the financial sector came following some negative analyst comments, with Fifth Third Bancorp (FITB) and SunTrust (STI) posting notable losses after Rochdale Securities analyst Dick Bove recommended selling the stocks.
The major U.S. averages saw choppy movement in late session dealing, finishing near their worst levels of the day. The Dow closed down by 104.22 or 1.1 percent to 9,867.96, the Nasdaq dropped by 12.62 points or 0.6 percent to 2,141.85, and the S&P 500 slipped by 12.66 points or 1.2 percent to 1,066.94.
Crude oil prices plunged away from a yearly high on the New York Mercantile Exchange on Monday as global equities fell, raising concerns over the economy. A stronger U.S. dollar also lessened oil's hedge value. Light sweet crude for December delivery fell to $78.68, down $1.82 on the session. Prices reached as high as $81.58, challenging last week's yearly high of $82, before hitting as low as $77.97.
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