Investors in New Zealand lost almost 600 million NZ dollars (470.6 million U.S. dollars) off the value of their shares as the share market slide accelerated and the market hit a 14-month trading low on Monday.
Almost 2.6 billion NZ dollars (2 billion U.S. dollars) have been shaved from the sharemarket since the beginning of the year. The slump came amid growing concerns about the global credit crisis, which blew up last year after huge losses sustained on subprime, or risky, home loans extended to American borrowers.
The NZX50 index was down 5 percent since the start of this year and more than 11 percent since its last peak in October. It ended the day on Monday at 3824.21 points, 48 points lower than the previous trading day.
ANZ National chief economist Cameron Bagrie said all eyes would now be on the United States to see if its economic problems would spread. With the European and Japanese economies slowing, the combined effect on Asia could spark a decline in demand for New Zealand commodities.
"New Zealanders are banking on commodity prices holding up but at the moment we're in an environment where we have some pretty non-trivial risks," he said.
Home owners would bear much of the brunt in coming months. Last week, ANZ National raised its key two-year fixed mortgage rate to 9.6 percent and Westpac followed. On Monday, Bank of New Zealand raised its rates to 9.6 percent.
The New Zealand dollar continued to hold its own against a sluggish U.S. dollar, ending the day on Monday at 0.7844 U.S. dollar.
Source: Xinhua
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