Nervous investors pulled the New Zealand sharemarket down yesterday as they cashed up and put their money on the sidelines.
After the price of crude oil jumped by more than US$5 a barrel, and Wall St stocks fell, the NZX-50 closed at 3439.22 points, down 48.2 points or
1.4 per cent.
Grant Williamson of Hamilton Hindin Greene said the drop reflected negative sentiment overseas, mainly due to high oil prices. The investor nervousness was likely to continue for a while yet.
"We are in a steady downward trend, inflation is starting to be spoken about overseas and the oil price continues to dampen equity prices."
He said New Zealand stocks seemed to be holding up better than most but were still under pressure from overseas markets.
"As for the outlook - we've got lower interest rates to look forward to, possibly next month."
Kevin Rendell of Gould, Steele and Co said trading in the retail market had been very slow, reflecting international trends, including Wall St's downward movement.
"At the moment the market is haunted by a large number of demons and they are all contributing - be it the economy, interest rates, fuel prices, food prices, the credit crunch."
He said the New Zealand sharemarket's movements had parallels with Australia's, in particular the industrial market.
Brent Street of Forsyth Barr said yesterday's trend was due to a negative lead from abroad and no good news to shake the market out of its dip.
Other than Fletcher Building shares, which dropped to their lowest price since 2005, Street said the downward turn was fairly even across the New Zealand market.
He said investors were concerned that interest rates might not be lifted until after September.
Oil fell US97c yesterday to US$135.41 after surging US$5.07 a barrel overnight on Wednesday.
