12 Mar 2020

NZ sharemarket down as US market falls

1:48 pm on 12 March 2020

The local sharemarket has extended early losses to fall to a six-month low as the spread of Covid-19 continues to disrupt economies.

Stock / market generic.

Photo: 123RF

The benchmark top 50 index has fallen about 280 points or 2.6 percent, with all but a handful of stocks falling in price.

The hardest hit have been companies involved in transport, travel, tourism, and with direct business in China.

Earlier today, the market opened sharply lower and the benchmark top 50 index was down more than 220 points, or about 2.1 percent in early trading.

It follows a modest fall on Wednesday.

The main US stock indices closed between 4.7 percent and 5.8 percent lower as the World Health Organisation declared the Covid-19 outbreak a pandemic, and investors fretted about a lack of detail of any measures to protect US economic growth. The indices have fallen more than 20 percent from their recent highs, classifying them as bear markets.

The main US share indices have fallen more than 20 percent from their recent highs, classifying them as bear markets.

Read more about the Covid-19 coronavirus:

The falls come as concern over the virus's spread disrupts manufacturing, prompts widespread closings and cancellations, and keeps people at home.

Australia's government is today due to unveil details of a multi-billion dollar coronavirus stimulus package to try to stop the economy sliding into recession. The ABC reported the support package would be worth more than $A15 billion, spread over this financial year and next.

Italy's Prime Minister Giuseppe Conte added new restrictions to the lockdown imposed to fight the coronavirus after figures showed Italy posting the highest daily increase in deaths of any country since the outbreak began.

Conte said all shops would be shuttered except supermarkets, food stores and chemists, and companies must close all their departments that are not essential to production.

Services such as hairdressers and beauty parlours will also be closed, along with bars and restaurants that cannot guarantee they can keep a distance of at least one metre between customers.

"We will only be able to see the effects of this great effort in a couple of weeks," he said, referring to the daily bulletins announcing the number of new cases and deaths.

On Wednesday, Britain's finance minister Rishi Sunak unveiled a £30bn package, while the Bank of England delivered an emergency cut in interest rates.

Sunak announced he was suspending business rates for many firms in England, extending sick pay and boosting NHS funding.

"Up to a fifth of the working-age population could need to be off work at any one time. And business supply chains are being disrupted around the globe," Sunak said in an annual budget speech to parliament.

- RNZ / ABC / Reuters / BBC

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