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New Zealand shares slump in early trading, Asian markets may follow

New Zealand shares slump in early trading, Asian markets may follow

New Zealand shares slumped in early trading Wednesday in response to another bout of global market wobbles that saw Wall Street plummet, as gloom surrounding U.S. subprime mortgage woes refused to go away.
The sell-off in the U.S. and in New Zealand signaled a poor day for Asian markets, said Barry Lindsay, director of research at First NZ Capital in Auckland.
The benchmark NZX-50 Index was down 1.4 percent at 4,045.6 points by 2317 GMT. Overnight in the U.S., the Dow Jones Industrial Average dropped 2.1 percent as 29 of its 30 member stocks fell. The Nasdaq Composite Index lost 60.61, or 2.4 percent.
"We have managed to avoid the sort of losses Wall Street suffered as the defensive nature of our market usually provides some support," Lindsay said.
However, further downside may follow if "Australia drops sharply, it's possible they will drop 2 percent," he said.
"The problems in credit markets will continue to lead to volatility in trading ... sharp drops and a recovery tend to follow in this environment," Lindsay added.
Blue chips led the way down, with bellwether Telecom off 1 percent at NZ$4.11, partly weighed down by the New Zealand Commerce Commission's draft ruling that the company must grant rivals access to its broadband services at specified prices.