Market falls produce buying opportunities
The benchmark NZX 50 Index fell 2.8% to 3229.824 and was earlier down about 3% to the lowest level this month. All but four securities in the NZX 50 fell today, with Telecom dropping to a 15-year low of $2.81.
The decline has spread across Asia today. The MSCI Asia Pacific Index fell 3% to 112.11, the lowest level in almost three years. Japan's Nikkei 225 Stock Average dropped 4.7%. Shares tumbled on Wall Street after Lehman Brothers failed to find a buyer and Merrill Lynch agreed to be acquired by Bank of America for US$50 billion in a hastily devised rescue.
Citigroup, the biggest US bank, fell 15% yesterday, while Goldman Sachs dropped 12% and Morgan Stanley declined 14%.
"This is the sign of a bear market, driven entirely by sentiment" said Rickey Ward, who helps manage $450 million of shares at Tyndall Investment Management. "Prices are incredibly volatile and there's limited liquidity. People are having to cross spreads to buy or sell."
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