KEY POINTS:
Stocks gained for the third successive day in early trading today after another strong, but bumpy session on Wall Street.
US blue chips rallied nearly 1 per cent while the technology-laden Nasdaq ended up around 2 per cent.
The winning streak in world equity markets began after the
US Federal Reserve on Wednesday (NZT) announced an emergency three quarters of a percentage point rate cut, the largest in 24 years.
That helped snap a record 14-session losing streak on the local market that saw the benchmark index decline over 10 per cent and wipe $5 billion off values.
Since Tuesday's close, the market has recovered 2.3 per cent.
The NZSX-50 index was up 32 points to 3690 by 10.15am.
Stocks were up across the board with market leader Telecom up 4c to 407, No 2 Fletcher Building up 14c to 1024 and Contact Energy up 8c to 745.
However, markets remained edgy and volatile.
Yesterday, the Dow Jones blue chip index underwent a 500 point swing from 2 per cent down but ending 2.5 per cent up. Today's session was also choppy.
The Nasdaq rose more than 1 per cent, boosted by a deal for tax rebates to stimulate the US economy and earnings that sparked some optimism about corporate profits.
Qualcomm Inc shares jumped 9.6 per cent to US$40.15 ($52.57), leading the major advancers in the Nasdaq and S&P 500, a day after the mobile phone chip maker posted a rise in quarterly profit.
Persistent concerns of an imminent recession eased, at least temporarily, after lawmakers agreed on the outlines of an economic stimulus package that would give 117 million US families a tax-rebate check.
"I think investors are encouraged (legislators) came up with an agreement in principle, in a quick fashion, and the speaker's remarks were encouraging in that she said it was bipartisan," said Angel Mata, managing director of listed equity trading firm Stifel Nicolaus Capital Markets in Baltimore.
Fisher Funds managing director Carmel Fisher believed the local market was likely to hit bottom in weeks rather than months.
"Because the correction's been so sharp and so severe...certainly in the New Zealand market, there would appear to be a lot of oversold stocks and in Australia as well," Ms Fisher said.
"The bottom might come for New Zealand first before the US - it does feel like it's within cooee, I just don't know when."
The situation for many companies had not changed much in the last three months, except their share prices were cheaper.
"If we buy more tomorrow, we might look a bit silly next Tuesday, but in July I think we're going to look quite clever for the buying that we've done this week," she said.
The New Zealand dollar continued its recovery, up nearly US2c to US77.40c since Wall Street's rebound yesterday.
It was underpinned by the Reserve Bank decision yesterday to keep interest rates steady at 8.25 per cent. The central bank gave no indication of rate cuts ahead, saying it was still concerned about inflation despite current uncertainty and world economic risks.
Reserve Bank Governor Alan Bollard's tough stance contrasted with the US Federal Reserve, which slashed its key US interest rate this week by three quarters of a percentage point in a bid to head off a US recession.
- NZPA
