That was the largest market capitalisation loss since December 2008.
The significant movements came from the index newcomer Bathurst Resources and Ryman Healthcare, accounting for 72.1% of the total decline in market capitalisation.
Bathurst Resources lost $283.2 million (or 32.6%) inmarket capitalisation, which was equal to almost 6% ofthe value of the entire South Island index at June 30, while Ryman Healthcare had a decrease of $110 million.
In percentage terms, Windflow Technology led the pack with a drop of 40.5%, closely followed by The New Zealand Wine Company with a 40% drop.
Other companies experiencing notable declines in market capitalisation during the quarter included PGG Wrightson (down $61.9 million or 17%), Lyttelton Port Company (down $33.8 million or 14.2%) and Pyne Gould Corporation (down $30.4 million or 35.1%).
Dunedin-based Scott Technology, which specialises in the design and manufacture of automated production and process machinery, was the strongest performer for the September quarter, with an increase in market capitalisation by $10.6 million following a successful rights issue.
It has been a busy quarter for the company which also bought a 75% share in a Chinese manufacturing factory.
The new factory specialises in lathe technology and energy-efficient motor manufacturing and was merged with Scott Technology's existing China operations on October 1.
In percentage terms, the smallest company in the index, Connexionz, made the largest gain in market capitalisation with an increase of 120% (or $1.2 million) in the quarter.
Other notable stock performances included Skyline Enterprises with an increase of $6.7 million (3.3%), Smith City Group with an increase of $6.4 million (37.9%) and, in terms of percentage, Chatham Rock Phosphate with an increase of 98.4% ($6.3 million).
Paul Munro, a corporate finance partner in Deloitte's Christchurch office, said the index clearly had not been immune from difficulties affecting markets the world over.
Warnings signs of global economic deceleration, concerns over the Eurozone sovereign debt crisis, the US Government's credit rating downgrade and New Zealand's double downgrade have all played their part in the index's decline.
"The performance of the index in this quarter just goes to prove that global patterns will definitely impact on South Island companies, particularly export-focused businesses, regardless of the conditions in the local environment.
"Nonetheless, the longer-term picture for these companies is positive, particularly with the predicted economic upturn from construction activity associated with the Christchurch earthquake recovery in the year ahead," he said.
On an industry basis, the biotechnology sector was the only one to record a positive result, up by 9.7%, driven by Pacific Edge, while the retail and manufacturing and distribution sectors only had marginal falls, decreasing by less than 1% each.
