The New Zealand sharemarket opened lower as investors scrambled to absorb a complex international situation.

Wall Street initially fell in response to the massive Japanese earthquake on Friday but losses were reversed and gains posted on relief that the latest events in the Middle East had not produced an escalation of tensions.

The benchmark NZX-50 index opened down 7.911 points at 3374.93 after finishing down 23.39 points on Friday.

Telecom was down 1c at $2.03 and Fletcher Building was down 4c at $8.75 but NZOG was up 1c at 93.

Tower shares fell 8c to $1.78 after dropping 4 per cent on Friday as the insurer and fund manager disclosed that its costs are likely to be driven up by as much as $20 million by the Christchurch earthquake and its aftershocks.

Pumpkin Patch rose 3c to $1.30.

NZ Refining was initially untraded but rose after oil refinery shares rose on Friday after Japan's refinery capacity was reduced by the earthquake.

***

In the US the Dow Jones industrial average rose 59.79 points, or 0.50 per cent, at 12,044.40. The Standard & Poor's 500 Index climbed 9.17 points, or 0.71 per cent, at 1304.28. The Nasdaq Composite Index added 14.59 points, or 0.54 per cent, at 2715.61.

Japanese shares traded in New York fell sharply. The Bank of New York Mellon's index of Japanese ADR's lost 2.1 per cent. Toyota lost 2.1 per cent to $85.65.

Investors said some industrial shares could benefit in the rebuilding operation in Japan but said information on the extent of damage was still scarce.

Howard Ward, a fund manager at the GAMCO Growth Fund, said speculative moves would likely be a short-lived overreaction.

"It's generally a mistake for people to be too reactive to a natural disaster like this," he said.

"The long-term impact is probably going to favour large equipment CAT-type stocks and some of the basic materials," said Marco Pado, US market strategist at Cantor Fitzgerald & Co.

- NZPA