The NZX50 followed Wall Street’s overnight slide, closing down 2.15 per cent.
It’s the first time since July 9 that it’s been down below 2 per cent in a single day. Wall Street had closed down around 2.5 per cent and the Australian Securities Exchange closed down around 2 per cent.
Hamilton Hindin Greene investment advisor Mark Hampton said it was one of the more dramatic days the markets have seen recently.
There was nothing obvious driving the sell-off, but it was likely to be a combination of profit-taking after some strong months, tinged with investors being spooked by the GameStop drama that engulfed Wall Street earlier this week.
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Retail investors took to a Reddit message board to take on big Wall Street funds, which had bet on GameStop prices falling.
With Reddit users cloaked in anonymity, there is no way of knowing whether messages touting GameStop came from average Joes or scam artists executing a pump-and-dump stock scheme.
GameStop shares more than doubled, to US$347.51 (NZ$485.92) each, and have soared more than 400 per cent this week.
Some of the biggest US companies reported overnight, Tesla, Facebook and Apple, all beat earning expectations, but because of the sell-off they were all dragged down, Hampton said.
Thursday was the third down day in a row for the NZX, but the stockmarket was back where it was two weeks ago, Hampton said.
This is just a little bit of a correction, which people have been expecting for a while.
Trustpower announced to the NZX it would undertake a strategic review of its retail business, to consider splitting from power generation.
Trustpower, is majority owned by fellow NZX-listed company Infratil, and sells electricity, gas, broadband and mobile phone plans, as well as generating power.
Chairman Paul Ridley-Smith said the review was expected to take a number of months.
The timing was interesting, because Infratil recently had a takeover offer from the Australian super fund on the understanding that it would exclude Trustpower, Hampton noted.
The NZX also had its hand slapped by the Financial Markets Authority (FMA) for not being properly prepared for the DDoS (distributed denial of service) attack that put the NZX out of action for virtually four days last August.
FMA chief executive Rob Everett said it might have been better handled with more planning.
There were no winners on the NZX50 today, and the biggest losers were the power companies Meridian, Contact and Mercury. But a few bad days didn’t take the gloss off what had been a good few weeks, Hampton said.
Mercury is still up 4.87 per cent for the week and 10 per cent for the month.