The sharemarket fell for the fourth consecutive day yesterday, losing another two per cent to close at 1912.09.
A combination of comments about the New Zealand economy on Wednesday and a definite outward flow of foreign money yesterday provided the catalyst for the losses, Greenslades broker David Fergusson said.
"The market has
picked up on the comments coming out of the Reserve Bank in relation to stagflation, and we are seeing that theme carried through in the market overall," Mr Fergusson said.
"Market jitters about the comments from the select committee on Telecom also really pulled the market down. The market has perceived that as being negative."
Brett Wilkinson of DF Mainland said overseas sellers were "taking no prisoners" as they looked to leave New Zealand.
"Telecom was the prime casualty because it was illiquid," he said.
Telecom dropped 31c to close at 540 on trade of 5.7 million shares worth $31.53 million.
Fletcher Challenge stocks plummeted for a second consecutive day. Energy fell as low as 755 before recovering to close down 22c at 768.
Shareholders in Australian oil company Petroz yesterday rejected a proposal from Energy that would have enabled it to raise its stake from 14.99 per cent.
Energy as also affected by market speculation that the Commerce Commission would reject Royal Dutch Shell's application to take it over.
"Obviously the market is reasonably jittery, to put it mildly, about the outcome of the Commerce Commission decision due on October 13," Mr Fergusson said.
Number two stock Carter Holt Harvey led the market with turnover of 9.5 million shares worth $31.53 million, to close up 1c at 162.
Baycorp was the one stock to buck the trend closing up 15c to 1180 after announcing the company had placed shares with institutional investors in Australia.
Sky City fell 20c to 670, The Warehouse 6c to 560 and Wilson & Horton lost 15c to 1240. Montana closed up 6c at 320, andLion Nathan dropped 2c to 482.
- NZPA
