Market down 1 per cent in delayed reaction to poor US job figures

The New Zealand sharemarket dropped by just under 1 per cent yesterday in a delayed reaction to Friday's worse-than-expected US jobs report for May and in response to heightened uncertainty surrounding Europe's debt crisis and doubts about China's growth rate.

New Zealand market participants said the local market held up reasonably well, given the turmoil on world markets.

"In the relative beauty parade, it is the least ugly at the moment," said Shane Solly, portfolio manager at Mint Asset Management.

He said New Zealand appeared be benefiting from the fact that it had a relatively high number of defensive-oriented, high-yielding stocks.

Rob Mercer, head of research at Forsyth Barr, said the market had given up gains made over the March quarter.

He said markets generally were going through periods where investors opted to ignore the risks and then go through periods were the risks were re-emphasised.

By the close, the NZX50 index was down by 31.2 points (0.9 per cent) to 3420.8 but off its session lows.

The US data showed that only 69,000 US jobs were created in May - about half what the market had expected, which sent Wall St stocks into a spin, the Dow Jones index dropping by 275 points on Friday and by 17 points on Monday. The index has fallen by 2.35 per cent since the data's release.

Markets were also spooked by renewed fears about a possible Greek exit from the eurozone and predictions by the World Bank that China's economic growth would ease this year.

New Zealand didn't feel the immediate effect of Wall St's woes because of the Queen's Birthday holiday.

In Australia, the All Ordinaries index lost 83.5 points, or 2 per cent, to end Monday's session at 4033.4 but picked up lost ground yesterday.