Key Points:

Bullish sentiment from Wall Street filtered through to the local sharemarket, but in a weaker dose than in Australia and other markets.

A further rebound in market leader Telecom from three-month lows also helped underpin the market.

Wall Street rallied sharply after indications from the Federal Reserve that the next move in interest rates will be down. It left interest rates on hold and stopped commenting that the next move in rates was likely to be up.

Goldman Sachs broker Jeremy Coe said markets may have jumped the gun.

"A lot of people are talking it could be a false rally. While the Fed was more dovish than people were thinking, it was probably because they are somewhat worried about the US economy going into recession."

The NZSX-50 benchmarket index closed up 23.52, 0.6 per cent, on 4076.03. Turnover was solid with 33 million shares traded worth $110 million.

Telecom closed up 13c on 473, to build on yesterday's 5c rise. Talk that the sale of its directories unit will be announced any day. Mr Coe said it also rose in line with offshore markets and in tandem with Telstra, which closed up 7c on 500.

Tower, which has had a rocky ride recently, rose 6c to 235 on little news but in step with Australian financial stocks.

Nuplex rose 5c to 750 following an upbeat management commentary. Mr Coe said some analysts were unconvinced its objectives were achievable but Goldman Sachs is the targets can be met.

Rakon hit a record high of 500, up 12c despite the New Zealand dollar making another steep ascent.

Fisher & Paykel Healthcare was one stock to succumb to the high currency, falling 5c to 380.

"While they reiterated their guidance a couple of weeks ago, it was on the proviso that the currency was around 63c. Now it's nowhere near that, clearly, so people are thinking that earnings are impacted and you might see the stock come back a bit further," said Mr Coe.

Lion Nathan fell 16c to 984 but most Australian stocks listed here were strong including Westpac, up 35 to 2970 and ANZ up 40c to 3330.

NZ Refining gained 18c to 675 on the recovery in oil prices and refining margins.

Fletcher Building had a volatile session, swinging from positive to negative and ending 11c down on 1092. Contact Energy closed 5c up on 900.

Trans Tasman Properties was up 4c to 60c after Hong Kong-based SEA Holdings launched another bid at 60c to buy the 19.45 per cent of the property development company it did not own already.

Among the smaller stocks, Kirkcaldie & Stains rose 10c to 290, Allied Workforce rose 3c to 125, while Restaurant Brands, due to fall out of the top 50 next month, fell 3c to 98c. CanWest Mediaworks fell 4c to 206.