Slide on Wall Street hits NZX trading

The local sharemarket has taken a tumble this morning in the wake of a large selloff in US markets, sparked in part by negative data about the economic recovery.

New Zealand's share market immediately fell two percent on opening

The local market has also been reaching near record highs in recent weeks. [file pic]
Photo: RNZ / Rebekah Parsons-King

The benchmark top-50 index is down about 150 points or 1.2 percent in early trading, with stocks sold off across the board.

The local market has also been reaching near record highs in recent weeks, driven by demand for top companies including A2 Milk and F&P Healthcare, as well as some tech companies.

Wall Street’s main indices had their biggest one-day falls in three months after posting record highs in recent weeks.

The slide was led by major technology stocks, which analysts said was a reaction to overheated speculation.

The Nasdaq led the pullback with a decline of almost 5 percent a day after it and the S&P 500 posted record closing highs.

The Nasdaq’s biggest drags came from heavyweights Apple, Microsoft, Amazon, Tesla and Nvidia Corporation.

New economic data in the US also highlighted concerns about a long and difficult recovery.

“Think about the mounting number of risks the market has been shrugging off over the last couple of months here,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “We’re 60 days away from the election. That may be an area where investors are getting a bit spooked.”

She added: “Looking at the data today, the market has had the ability to power higher and hasn’t paid any attention to a macro environment which, yes, is improving which is encouraging, but the economy remains fragile here.”

Earlier in the day, data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, but remained extraordinarily high.

Separately, a survey showed US services industry growth slowed in August, likely as the boost from the reopening of businesses and fiscal stimulus faded.

The New Zealand stock exchange suffered trading halts last week and disruption for several days after hackers attacked its website.

– RNZ / Reuters

Published at Fri, 04 Sep 2020 00:40:25 +0000
Source: Slide on Wall Street hits NZX trading