New Zealand shares continue decline after Brexit

  • 27/06/2016
(Newshub.)
(Newshub.)

New Zealand shares extended their decline as the UK's surprise vote to leave the European Union stoked fears of a flow-on impact on commodity prices, credit markets and global economic growth.

The S&P/NZX 50 Index fell 1.2 percent 40 minutes after opening to 6,587.77.

New Zealand shares continue decline after Brexit

The local bourse shed 2.3 percent on Friday, falling throughout the day as votes were counted and reported.

Stock markets on both sides of the Atlantic sank on Friday as investors were blindsided by the British vote to leave.

The Standard & Poor's 500 Index retreated 3.6 percent on Wall Street, while Europe's Stoxx 600 Index plunged 7 percent.

"Looking at the futures, the Australian market looks like it's going to open flat, there might be some bounce-back in Asian markets but there are still a lot of unknowns," said Craig Stent, director and research analyst at Harbour Asset Management.

"The market's been looking for a reason to sell off for a period of time, and this has given them one. The New Zealand market's been very strong year-to-date so you may see some continuation of that retreat. It's uncertainty and markets don't like uncertainty."

The local market has gained 5.4 percent this year and reached an all-time peak of 7,039.42 on May 31. Monday's fall takes it back to trading levels last seen in mid-March.

Amid the heightened volatility, local newspaper publisher and radio station owner NZME will list on the NZX All Index on Monday, having demerged from its parent, APN News & Media, ahead of a potential merger with rival Fairfax Media's New Zealand operations.

The shares will begin trading on a deferred settlement basis at midday, while the demerger will be implemented on Wednesday. Trading on a normal settlement basis will start on July 1.

NZN

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