NZ sharemarket drops after global sell-off

Sharemarket drop graphic
The NZX 50 has opened down after the three major US stock indexes plunged over 5 percent. Photo credit: Getty.

The S&P NZX 50 opened 3.48 percent down at 10766.570 on Friday morning.

The drop follows falls on overseas markets overnight. 

The Federal Reserve posted a grim economic outlook on Wednesday, sending US sharemarkets into a tailspin. Forecasts that GDP would shrink by 6.5 percent, unemployment would reach 9.3 percent and a Harvard Global Health Institute estimate that deaths would reach 200,000 in September sent shock waves through Wall Street.

According to Reuters, all three major US stock indexes were down by over 5 percent, the worst drops since the lockdown on March 16.  Falls were over 9 percent across 11 major sectors of the S&P 500.

The Dow Jones Industrial Average dropped by 6.9 percent (1,862.92 points) to 25,128.17.  The S&P 500 dropped by 5.89 percent (188.04 points) to 3,002.10 and the NASDAQ Composite dropped by 5.27 percent (527.62 points) to 9,492.73.

The UK FTSE fell by 3.99 percent on Thursday, marking its worst session since late March, The Telegraph reported.

Talking to Reuters, Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago, said that there was "no buy point."

"Everything's for sale," Tim Ghriskey, investment strategist at Inverness Counsel added.