KEY POINTS:
The New Zealand and Australian sharemarkets have quickly felt the effects of the Bear Stearns financial catastrophe in the US.
by 3pm today, the key NZX-50 index had lost 1.96 per cent of its total value to 3433. That's almost 70 points down from Friday's close.
The benchmark
index closed down 73 points, or 2 per cent, on Friday to end the week at 3500 - its lowest mark since 2006.
In Sydney, the Australian All Ords index has fallen 72 points inside the first hour of trading today. The index now stands at 5215 after closing Friday at 5287.
Friday's events happened amid a widespread sell off, despite a positive session on Wall Street and elsewhere in the region.
The New Zealand stock exchange has had a peculiar habit lately of going against the trend of the Australian and other Asian bourses. If they rose, we frequently dropped, while if they lost ground, we seemed to resist that trend and claw our way upwards.
Hamilton Hindin Greene partner Grant Williamson noted the trend again on Friday:
"Our market outperformed the international markets on Thursday - going into positive territory while everyone else was negative - and we've done the opposite today," he said in media reports late on Friday.
Top stock Telecom reached it lowest price in more than 15 years on Friday, at 378. In early trades today, it has lost 5 cents.
Friday was a bad day for the big boys of the NZX.
Second-ranked Fletcher Building slid 25c to 875, a 17-month low and well below its record high of 1342 in May 2007. It too joins the downward trend this morning, shedding 3 cents.
It would be hard to imagine good weeks ahead for the likes of Auckland Airport or Abano, both the objects of takeover bids which are languishing in the mire.
This morning Standard & Poor's has placed Auckland Airport's 'A / A-1' credit ratings on CreditWatch with negative implications following the announcement last Friday that the Canada Pension Plan Investment Board's partial takeover offer has received shareholder approval.
And energy companies Contact and Vector appear doubtful to be able to muster a head of steam to reverse their downward trends of late last week.
There will be no action on the US markets for watchers to observe today, it being Sunday over there; but the Fed is under pressure to reduce the funds rate tomorrow to a level reminiscent of the severe 2003 lows of Alan Greenspan's era - a miniscule 2 per cent - and the financial markets are still reeling from the dramatic Bear Stearns bailout.
The stricken US Bank, fresh from narrowly avoiding collapse, is nearing a deal in which it could be bought by JP Morgan Chase for some US$2.2 ($2.73) billion, The Wall Street Journal reported online today.
Meanwhile US President George W Bush remains reticent on arriving at any quick fixes, leaving analysts predicting further crises as inevitable.
In other market movements today, The Warehouse was down 5c at 600 and Fisher & Paykel Appliances was down 2c at 249. Port of Tauranga was down 9c at 636. Contact Energy was down 10c at 850 and Auckland Airport was down 3c at 237. TrustPower was down 3c at 782.
- additional reporting by NZPA
