The New Zealand sharemarket's benchmark index fell to a near seven week low today as investors focused on the implications of the Greek debt crisis even though the economic news in New Zealand was positive.
The NZ dollar surged when the unemployment rate had its largest fall on record in the March quarter, and after Reserve Bank of New Zealand governor Alan Bollard said the economy was entering a less fragile recovery phase.
The positive local story was overwhelmed by ongoing savage pull back in equity markets globally, with the Japanese market falling sharply today and the Australian market at a fresh two-month low.
"The massive underperformance of the ASX-200 versus the rest of the world continued today as a barrage of headwinds continued to buffet the market. There are just too many uncertainties at the moment, and we all know markets hate uncertainty, " Ben Potter, market strategist at IG Markets said.
Stephen Wright at ASB Securities said the New Zealand market was still doing better than most of the rest of Asia and the employment survey was quite positive for the market.
The benchmark NZX-50 index closed down 30.893 points, or 0.951 percent, at 3217.924, having fallen 49.2 points yesterday. In mid-April the index had been at a 19-month high around 3349 points. Turnover was worth $94 million. There were 19 rises and 72 falls among the 115 stocks traded.
Telecom closed unchanged at $2.15 after trading as low as $2.13, which was just off the record low of $2.11 it reached on March 19. Investors are waiting to see what the company says about future dividends at its interim profit report tomorrow. The flavour of a report on failures of its XT network may also be given and there is a possibility of further job losses.
After the market closed Reuters reported that Australian company TPG Telecom has bid $US400m for Telecom's AAPT business and is the preferred bidder.
Fletcher Building fell 11c to $8.15, SkyCity fell 3c to $3.05, Sky TV fell 4c to $4.87, Air NZ fell 2c to $1.27 and Nuplex fell 7c to $3.29.
Contact Energy fell 1c to $6.20 and NZOG fell 1c to $1.50. Tower fell 1c to $1.97 and Infratil fell 1c to $1.70.
ING Property Trust rose 1c to 76c, Goodman Property rose 1c to $1 and Cavalier Carpets rose 1c to $2.76. TrustPower rose 1c to $7.31 and Hellaby Holdings rose 4c to $1.70.
Sanford fell 5c to $4.25 and The Warehouse fell 1c to $3.69.
In the United States, resource and industrial stocks, sensitive to the outlook of global economic growth, weighed on the market. Energy shares were also pressured as the price of oil fell nearly $US3 to $US79.97 a barrel.
The Dow Jones industrial average dropped 0.5 percent to 10,868.12, the Standard & Poor's 500 Index fell 0.7 percent to 1165.87, and the Nasdaq Composite Index lost 0.9 percent to 2402.29.
