New Zealand shares suffered their biggest drop in nine months yesterday after apparent trading glitches caused Wall St's biggest tumble since the 1987 crash.
The NZX-50 was down 1.87 per cent at market close last night, after falling by as much as 2 per cent around midday yesterday.
Hamilton Hindin
Greene client adviser James Smalley said yesterday's trading highlighted how "skittish" the NZX was.
"The wounds of the volatility that we saw through 2008 and 2009 are still very real in the minds of investors. It is very much a 'sell first, ask questions later' type of mentality out there."
He said such a mentality might not be in investors' best interests.
"They are not taking any chances at all."
If a "bounce back" was seen on Wall St today, then New Zealand markets would probably see recovery during Monday's trading, he said. Individual stocks on the NZX-50 had remained stable during yesterday's trading, with no significant falls.
James Snell, director of institutional equities at First NZ Capital, said yesterdays's trading on the NZX had been "volatile to say the least".
"It was a very big, powerful sell-off in what looks to be error-related trading."
Snell said the Dow Jones was down by almost 10 per cent at one stage yesterday, and the Australian futures markets were "down the best part of 9 per cent, or 400 points".
"Given that [New Zealand doesn't] have an active overnight futures market, our market actually opened okay - down 45 points - it actually has drifted off a little bit since then with the Asian markets opening significantly weaker as well."
He said the big fear was of contagion from Greece being mirrored in other European countries such as Spain and Portugal.
Smalley agreed, saying: "Why that [contagion] has an impact is that it could affect economic growth in Europe, which could then spread on to the world."
Westpac senior market strategist Imre Speizer said the New Zealand dollar stabilised yesterday after a tumble on Thursday night, dropping from US72.75c to US70.10c against the greenback. The kiwi had regained ground to US71.16c last night.
STOCK WOBBLES
* NZX-50: Down 1.9 per cent
* NZ DOLLAR: US71.16c against the greenback, €55.94c against the euro, 48.37p against the pound
* ASX200: Down 2 per cent
* NIKKEI: Down 3.1 per cent
* DOW JONES: Down 3.2 per cent
NZ shares drop most in nine months as volatility returns
New Zealand shares suffered their biggest drop in nine months yesterday after apparent trading glitches caused Wall St's biggest tumble since the 1987 crash.
The NZX-50 was down 1.87 per cent at market close last night, after falling by as much as 2 per cent around midday yesterday.
Hamilton Hindin
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