Tech stock tumble lowers NZX 50
The NZX 50 Index declined 44.284 points, or about 0.9 per cent, to 5031.56 on Tuesday. Within the index, 29 stocks fell, 10 rose and 11 were unchanged. Turnover was $126.9 million.
On Wall Street, the tech heavy Nasdaq Composite fell for a third day as investors reduced exposure to companies such as Google, Apple and Yahoo.
Local tech and growth stocks which had made gains at the start of the year fell as investors questioned whether their sales growth could deliver profits.
Xero plunged 12 per cent to $31.50. The Wellington based software company surged over 200 per cent last year but has declined 30 per cent in the past month.
Diligent, the governance app maker, fell 1.2 per cent to $4.25.
“The main stocks to get sold off here are in the IT sector, which is very similar to what happened in the States last night but the real big mover has been Xero which h asics gel as come under some pretty aggressive selling for a number of days now,” said Grant Williamson, director at Hamilton Hindin Greene.
“There was certainly a little bit too much hype in those stocks and everybody wanted to jump on board.”
Pacific Edge, the bio tech company which surged 109 per cent in asics gel the past year, dropped 5.4 per cent to $1.22.
A2 Corp, the milk marketer which has gained 47 per cent in the past 12 months, fell 1.2 per cent to 84 cents.
Ryman Healthcare, which rose 63 per cent in the past year asics gel , slipped 0.7 per cent to $8.33.
“Good news has really pushed those share prices above where they should have gone, probably driven by a little bit of investor hype,” Mr Williamson said.
Chorus fell 1.4 per cent to $1.765. The telecommunications network provider lost its appeal to the High Court over the Commerce Commission’s decision to slash pricing for access to its copper lines.