UPDATE;NZ DROPS TO -3.7% in five minutes
New Zealand stocks fall 2.1 pct after U.S. downgrade
On Monday 8 August 2011, 10:10
WELLINGTON, Aug 8 (Reuters) - New Zealand's benchmark stock index opened 2.1 percent lower on Monday, as the market was hit by the credit ratings downgrade for the U.S. and the European Central Bank pledged to "actively implement" its bond buying programme.
Fears are growing that the debt-induced turmoil on both sides of the Atlantic may be enough to tip the global economy back into recession, with Wall Street posting its worst week since November 2008 last week.
New Zealand's benchmark NZX-50 index was 2.6 percent lower at 3,191.175, its lowest level since October 2010.
Top stock Fletcher Building Ltd opened down 3.4 percent at NZ$7.45 while Telecom Corp was 2.3 percent lower at NZ$2.51.
Falling stocks outnumbered the rises 63 to one.
Standard & Poor's downgraded the United States by one notch to AA-plus from the top notch AAA level, and said the decision reflected its view that the debt ceiling deal agreed last week fell short of what was needed. For more see
Stocks in Tel Aviv , one of the first global equity markets to open since the downgrade, dropped 7 percent on Sunday in response to S&P's action late on Friday.
In early Asia-Pacific trade on Monday the ECB released a statement saying it would "actively implement" its bond-buying programme, raising hopes it would aggressively buy Italian and Spanish bonds in a bid to stop the debt crisis spreading further.