The NZSE50 was down 1.98% or 65 points yesterday, following a broad sell-off of all company stock, with only a few exceptions, but including retailers The Warehouse closing down 7.1%, or 32c at $4.19, Briscoes down 9% to a record low of 90c per share and Hallensteins down 5% at $2.68, ABN Amro Craigs broker Peter McIntyre said yesterday.
"The integral part to how the New Zealand market performs during the next 12 months will be the July-August reporting season," Mr McIntyre said.
New Zealand companies were relied upon to pay dividends, but if dividends were down, there would be a deterioration in share prices and a general sell-off, he predicted.
"The health of the New Zealand market is contingent upon companies continuing to pay dividends," Mr McIntyre said.
In the US, the Dow was down 3.03%, or 358 points - a 21-month low - and tech-stock Nasdaq down 3.33% by 80 points, following Goldman Sachs having downgraded its outlook for General Motors and some financial institutions, including Citigroup, Mr McIntyre said.
Similarly, the Nasdaq was down because of Goldman's downgrade of tech-company Oracle.
The only major market up yesterday was the French CAC40, up 0.4%, while the UK Footsie was down 2.61% and German Dax 2.93% down, or 158 points.
Trading was still under way in Asia at 5pm yesterday, but it appeared most bourses would end down, with Japan's Nikkei down 2%, Korea's Kospi down 1.97% , Singapore down 1.3% and China's Shanghai index down 4.63%.
The ASX 200 in Australia was rebounding from 3% down towards 1.17% down.
Mr McIntyre said the US Federal Reserve had raised concerns about inflation with a bias to put interest rates up from the present 2%.
They had been slashed tothat rate in recent months to counter the economic downturn, housing slump and unease with the global credit crunch.
US oil hit a record of $US140.39 yesterday, after Libya said it was studying possible options to cut output in response to potential US actions against Opec countries, Reuters reported yesterday.
Oil prices have doubled from $US70 a year ago on supply disruptions and geopolitical tensions in the Middle East.
Rising flows of cash into commodities from investors seeking to hedge against inflation and the weak US dollar have also added to gains.
The weak US dollar had hovered near three-week lows against the euro, due to weak US economic fundamentals and renewed credit concerns.
Opec president Chakib Khelil said in an interview that prices could reach $US170 a barrel in the coming months, and he reiterated the cartel's position that speculation - not a supply problem - was driving oil to new highs.
"I forecast prices probably between $150 and $170 during this summer.
That will perhaps ease towards the end of the year," Mr Khelil told France 24 television, according to a text of the interview released by the station.
