12.15 pm
New Zealand's sharemarket rebounded nearly two per cent this morning - despite Wall Street's 7 per cent fall on reopening after the World Trade Center disaster.
Brokers said the local market had anticipated Wall Street's fall, having lost around 9 percent since the disaster including a 4.6 percent plunge yesterday.
The
NZSE-40 index, which hit a three-year low yesterday, was up 33.14 points, or 1.85 per cent, to 1823.46 at 10.49am.
JB Were broker Peter Stokes said investors were nibbling away at cheap stocks after finding that "the meltdown" feared on Wall Street hadn't eventuated.
However trading was on thin volumes ($25 million) and sentiment fragile.
"A lot of the volatility is out now, we're not going to get these five per cent swings... The test wasn't necessarily what happened last night in the States, I believe the test is what happens over the next couple of months."
Mr Stokes said expectations were that Australia's trading would be fairly strong. Many brokers were also comforted by the S&P index which only down 4.92 per cent last night and "arguably more accurate" than the Dow.
Salomon Smith Barney broker Craig Robins said today's rebound was understandable.
"Yesterday, it was a bit of bolt out of the blue, I guess it was the Ansett situation that really unnerved markets on both sides of the Tasman... and that's where the market got sold off very aggressively."
Air NZ shares, which took a 40 per cent hammering yesterday, initially rallied 3c, 10 per cent, but trade was volatile. By mid-morning the residents-only A shares were up 1c to 32 but had traded down to 30 cents. The freely tradeable B shares were steady at 30c.
Mr Robins said trading in Air NZ was also very tentative and was dominated by retail investors.
Market leader Telecom, which yesterday hit a seven-year low, rose 11c to 455.
US stocks posted a wrenching slide with the Dow Jones industrial average pushed down to its biggest point drop ever, as investors shrugged off a surprise interest-rate cut by the Federal Reserve and focused on fears that last week's terror attack on the world's financial heart may stoke a global recession.
The Dow Jones industrial average plunged 684.81 points, or 7.13 per cent, to end at 8,920.70, logging its biggest point loss ever and marking its lowest close since late 1998. The loss did not make the Top 10 biggest daily percentage drops, which is still headed by the 22.6 per cent decline on Black Monday, when the stock market crashed on October 19, 1987.
The broader Standard & Poor's 500 Index lost 53.77 points, or 4.92 per cent, to finish at 1,038.77 and the technology-laced Nasdaq Composite Index sank 115.82 points, or 6.83 per cent, to 1,579.55. Both indexes were the lowest since mid-October 1998.
Other shares which took a major hit yesterday were showing signs of improvement. They included market star Baycorp which fell 70c yesterday but by 10.20am was up 11c to 1101; Air NZ stakeholder Brierley was up 3c to 36; Fisher & Paykel up 10c to 1210 after a 52c fall yesterday; and insurer Tower up 15c to 445.
Auckland Airport was up 14c at 310, after closing down 39c yesterday on concerns about Air NZ's viability. Tourism companies were also affected -- THL was up 5c to 107 today after falling 24c yesterday.
Energy companies, some of which were the few beneficiaries of yesterday's uncertainty, began to readjust this morning. New Zealand Refining Company was down 40c to 1520 after climbing 60c at yesterday's close. Contact was up 8c to 324.
Sky City recovered 31c to 1061.
- NZPA
12.15 pm
New Zealand's sharemarket rebounded nearly two per cent this morning - despite Wall Street's 7 per cent fall on reopening after the World Trade Center disaster.
Brokers said the local market had anticipated Wall Street's fall, having lost around 9 percent since the disaster including a 4.6 percent plunge yesterday.
The
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