NZ market avoids regional carnage

By AARON LIM - BusinessDay.co.nz | Wednesday, 08 October 2008

The New Zealand stock market finished the day down 1.9 percent, but performed better than other markets in the Asia Pacific region, which continued to post steep falls.

The benchmark NZX 50 index finished the day down 55.881 points, or 1.90 percent at 2948.31.

Leading stock Telecom was down 11c to $2.67, with Fletcher Building falling 6c to $6.36.

Contact Energy ended the day at $7.40, down 5c.

ANZ was down 120c at $19.80, with Westpac shaving off 55c to $25.20.

In Japan, the world's second largest economy, the benchmark Nikkei average fell 4.5 percent to 9695, hitting a fresh 5-year low.

Australia's S&P/ASX 200 index plunged 4 percent to 4433.4 in afternoon trading, a day after rallying on a much larger-than-expected interest rate cut by the country's central bank.

Australia's 100 point cut in lending rates has led to speculation of a substantial rate cut here in New Zealand when the Reserve Bank meets on October 23 to review the official cash rate.

The MSCI Asia-Pacific index of stocks outside of Japan was down 4.4 percent, close to a 3-year low. The index has plunged 25 percent in the last month, down 46 percent for the year to date.

In Hong Kong, the Hang Seng index fell 5.4 percent to a 27-month low after a market holiday on Tuesday.

The establishment of a $700 billion U.S. rescue fund, emergency measures by European governments and massive injections of funds by central banks around the world has so far been unable to restore confidence in rattled financial markets.

US Federal Reserve Chairman Ben Bernanke warned overnight that the current turmoil in markets could cause US economic activity to be subdued into 2009 and signalled a readiness to cut interest rates.

 Bernanke's sobering and candid tone in a speech overnight about the likelihood of interest rate cuts came days after European Central Bank President Jean-Claude Trichet prepared markets for easier monetary policy.

 - with Reuters