New Zealand shares dropped back in early trading, once again taking their lead from the United States where stock prices tumbled.
Investors on Wall Street were worried a proposed US$700 billion ($1.03 trillion) bailout for the financial sector may not resuscitate a slumping economy, while a record
spike in oil prices renewed concern about consumer spending.
Yesterday the New Zealand market surged 2.1 per cent, following the leap in US equities on Friday (local time), when the bailout announcement sparked Wall Street's best one-day advance since 1987.
But the US market swoon in the latest trading session wiped out nearly all those gains.
The Dow Jones industrial average dropped 3.3 per cent, the Standard & Poor's 500 Index slid 3.8 per cent, and the Nasdaq Composite Index fell 4.2 per cent.
Around 10.10am today the benchmark NZSX-50 index was down 0.77 per cent, dropping 24.92 points to 3230.8.
Telecom was down 3c early to 279, having yesterday staged a rare recent gain by adding 10c.
Fletcher Building was down 7c early to 725 after surging 34c yesterday, and Contact Energy was down 6c to 864 following yesterday's 13c gain.
Among the few stocks to show gains early were energy shares NZ Oil & Gas, up 7c to 148, and Pike River Coal, up 3c to 160.
Oil prices surged US$16.37 to settle at US$120.92 a barrel, its biggest one-day jump on record. A sharp fall in the US dollar added to oil's gains.
Gold and soybeans surged about 5 per cent and copper about 4 per cent as commodities generally benefited from the weak greenback and uncertainties about the proposed US bailout.
In this country, Sky TV shares were down 9c to 455, Fisher & Paykel Healthcare was down 7c to 302, Methven was down 6c to 149, F&P Appliances was down 5c to 166, and Mainfreight was down 5c to 680.
- NZPA
