23 Mar 2020

NZ stock market suffers biggest session drop since 1987 crash

1:30 pm on 23 March 2020

The New Zealand sharemarket has slumped to its lowest point in nearly two years and the New Zealand dollar is sharply weaker as the authorities step measures to counter the effects of the Covid-19 coronavirus virus.

New Zealand's share market immediately fell two percent on opening

Photo: RNZ / Rebekah Parsons-King

The NZX Top 50 index has fallen about 780 points, or 8.5 percent, its biggest single session fall since the market crash of 1987.

Every stock in the index has fallen with tourism, travel, and hospitality businesses showing some of the biggest falls.

The interest rates for longer dated government bonds have fallen sharply as a result of the Reserve Bank's $30 billion buyback scheme.

The New Zealand dollar is down more than 1 percent against most major currencies, as investors sell off risky assets.

At opening on Monday, the NZX Top 50 was down 450 points, or 4.9 percent, in early trading.

Early on Monday morning, the Reserve Bank said its Monetary Policy Committee (MPC) decided to implement a large scale asset purchase programme (LSAP) of New Zealand government bonds.

The Bank's statement said the asset purchase would take place over the next 12 months and involve up to $30 billion of New Zealand government bonds across a range of maturities in the secondary market.

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