2 Sep 2015

NZX drops on renewed China fears

4:38 pm on 2 September 2015

The New Zealand sharemarket has mirrored other stock markets and fallen this morning after further evidence that China's economy is slowing.

A man watches a screen board at a stocks market in Huaibei, east China's Anhui Province, July 6, 2015.

A man watches a screen board at a stocks market in Huaibei in east China's Anhui Province. Photo: AFP

Chinese factory activity has contracted at the fastest pace in three years, triggering a bout of selling on stockmarkets globally.

The main index in Shanghai opened down more than 4 percent, following heavy losses in New York and London overnight. Wall Street fell about 3 percent, as did the UK's FTSE 100, while Europe's main markets dropped about 2.5 percent.

Share prices have also dropped in Hong Kong and Japan.

New Zealand's benchmark NZX 50 index had declined nearly 75 points. or 1.3 percent, to 5581 by 2pm, and Hamilton Hindin Greene director Grant Williamson said investors were nervous.

"We've seen investors doing a little bit of selling. Once again, it's not huge turnover, but given August was the worst performing month for the market since 2010, the new month hasn't started particularly well."

World markets reacted with panic on 24 August - dubbed China's Black Monday - after the Shanghai Composite closed down nearly 9 percent, extending earlier losses.

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