Stocks drop as NZX dips to its lowest level in two years

 It was the biggest single-session fall since late February.
It was the biggest single-session fall since late February. Photo credit: Image - Getty Images


The New Zealand sharemarket has had its worst single session in nearly four months, closing at its lowest level in two years.

The benchmark NZX-50 index dropped as much as 250 points, close to 2.3 percent and below the psychological 11,000 level, midway through trading for the first time since June 2020.

It was the biggest single session fall since late February.

Only two of the top 50 stocks were unchanged in price, with all others showing losses, notably A2 Milk, which was down 6 percent, with falls of 2 percent or more for other leading stocks including Mainfreight, Sky TV, finance group Heartland, Meridian Energy and Air New Zealand.

However, trading was muted with the often-influential Australian investors absent from the market because of a public holiday.

The slide followed Wall Street's plunge at the end of last week after data showed US inflation rising to a 40- year high of 8.6 percent.

The worse than expected numbers confounded hopes that inflation would show signs of peaking and temper the US Federal Reserve's aggressive interest rate rises.

The central bank meets later this week and a further 50 basis points (half a percentage point) rise is expected.

The inflation induced market jitters were felt on Asian markets as well, with the Japan and Hong Kong losing 3 percent, and Chinese stocks also easing.

The volatility is expected to continue when US markets resume trading with futures contracts pointing to losses of more than 1 percent.