NZ sharemarket dives on light volume

The New Zealand sharemarket tanked today on worries about so-called 'Main Street' rather than Wall Street.

The NZX-50 index is down 101 points, or 3.3 per cent, to 3049.

Brokers said the fall was on very low volume. Buyers had taken to the sidelines so sellers had to accept lower prices.

Telecom shares have fallen 10 cents today and are now trading at $2.79 each. Contact Energy shares are down 24c at $7.37 and Fletcher Building is down 23c at $6.60.

Last week the United States Government's US$700 billion ($1.05 trillion) bailout of its finance sector got through but investors were now worrying about the poor state of the US economy, rather than just the financial sector.

The New Zealand Treasury's report today on the state of the economy ahead of the election added to the bleakness.

Treasury said the economic outlook had deteriorated badly since the May budget and this meant reducing its revenue forecasts and increasing its predictions of costs such as benefits.


- NZPA