Share market drops 800 points

NZ and US share markets drop sharply

New Zealand's share market has opened sharply lower after US share markets had their worst losing session so far this year.

Radio NZ,

11 October, 2018

New Zealand's benchmark top-50 index fell 120 points or 1.3 percent in early trading.

The index has fallen for eight consecutive sessions and is at its lowest point in more than two months.

Only two stocks locally gained in price, neither of which were in the top-50 stocks.

The main Wall Street indices closed 3 percent lower with technology companies such as Amazon, computer chip makers, and luxury goods companies especially hard hit.

The drop on Wall Street has been sparked by rising interest rates and worries about global economic growth.

The S&P 500 and the Dow Jones Industrial Average fell 3.2 percent and the technology-laden Nasdaq was down 4 percent.

Investment manager Tim Ghriskey, of Inverness Counsel, said a combination of factors was driving markets lower.

"Bonds began to sell off again. The prospect of higher rates concerns investors... Then you have the [mid-term] elections coming up."

American stock markets have set record highs through the year and the correction comes when the US economy has been growing strongly, unemployment is at a 50-year low, but the Federal Reserve has been raising rates to counter inflation pressures.

Rising interest rates are proving attractive for investors to take some profits after Wall Street's record run and turn defensive by buying bonds.

Warnings about the effect of the US-China trade dispute on world growth and company outlooks were also affecting confidence.

- Reuters / agencies