14 Jul 2008

NZ and Australian markets down

1:37 pm on 14 July 2008

The New Zealand stock market is following Wall Street downwards.

At 12.25pm on Monday, the NZX 50 was down 31 points, or 1%, to 3191 on turnover of $43 million.

While the drop could be a minor reaction to the situation in the United States, a director at broking firm Hamilton Hinden Greene, Adrian Vance says it also reflects the general market outlook in New Zealand.

About 60% of trading was in New Zealand's largest listed company, Telecom. It was down 5 cents to $3.34.

Contact Energy was down 15c to $7.45 and Fletcher Building was down 11c to $6.27.

The Warehouse was down 2c to $3.98, Hallenstein Glasson was down 2c to $2.55 and Pumpkin Patch was down 1c to $1.43.

In currency markets: at 12.25pm on Monday, the New Zealand dollar was trading at US75.92 cents, 78.51 Australian cents, 38.26 pence, 80.89 yen and 0.4773 euro. The Trade Weighted Index was at 67.31.

The Australian share market also opened lower as banks dipped and miners also lost ground.

At 1030 AEST the benchmark S&P/ASX200 index fell 38.0 points, or 0.76 per cent, to 4941.9. The broader All Ordinaries lost 39.9 points to 5,027.9.

The September share price index futures contract slipped 17 points to 4,937, on a volume of 6,647 contracts.

Before the market opened, Toll Holdings said it would exit its majority stake in Virgin Blue by paying a special dividend to shareholders, using its shares in the airline.

The move follows years of speculation about what Toll would do with its 62.7% interest, which it inherited from a takeover of stevedore Patrick in 2006.

By 1231 AEST, shares in Toll had jumped more than 1% to $A6.45, while Virgin Blue added 1.5 cents, or 2.97%, to 52c. Qantas Airways was off 3c to $A3.19.

Other markets

New York and European stocks closed sharply lower on Friday after shares of Fannie Mae and Freddie Mac sank.

However, Treasury Secretary Henry Paulson said on Sunday the US overnment would expand its current line of credit to the two companies if they need to tap it.

The Dow Jones Industrial Average fell 128.48 points on Friday, or 1.14%, to close at 11,100.54. Standard & Poor's 500 index declined 13.90 points, 1.11%, to a close of 1,239.49.