The New Zealand sharemarket held up well while the dollar fell following the 7.5 magnitude earthquake that hit the Upper South island and sent hundreds of aftershocks rattling across the country.

"Against the backdrop of the worldwide markets, we've had a good day," said Mark Lister, head of private wealth research at Craigs Investment Partners.

"But it's possible we haven't seen the worst of it," he said. "The economic impact of the earthquakes and aftershocks remains up in the air until the dust settles." Lister said the markets would be jittery over the next few days and he expects currency will slump as investors sell the kiwi to avoid risk.

The S&P/NZX 50 Index closed up 0.6 per cent at 6,737.76, led by companies that could benefit from earthquake repairs such as Fletcher Building, which closed up nearly 4 per cent at $10.53.


Tower Insurance was the biggest decliner in the S&P/NZX 50 Index - ending the day down 7.1 per cent to 79c. Lister said the stock was only down on the assumption of insurance payouts and so far most property damage had proved to be superficial rather than structural.

Tower's share price recovered slightly through the day after being down 9.4 per cent in the morning.

Harbour Asset Management portfolio manager Shane Solly said trading volumes had been light which showed people were being cautious.

"It's been a solid response to a challenging time."

Despite the ongoing risks of aftershocks, companies had showed transparency and resilience which kept the market consistent throughout the day, Solly said.

The muted response in the sharemarket was a sign of a strong government position and resilient business leaders, he said.

"We know how to deal with this," he said. "Our circumstances and position now are probably better than they were before the Christchurch quakes."

Global media exposure of the earthquake overnight could effect stocks when the stockmarket opens tomorrow but Solly was confident it would continue to perform well.

The New Zealand dollar fell to US70.98c as at 5pm yesterday from US71.26c in late New York trading on Friday.

However, the interest rate market showed no concerns that the Reserve Bank would cut interest rates as it did after the 2011 quake in Canterbury.

The drop in the NZ dollar was also part of a trend since the US election.

"Interest rate market expectations are watched closely and haven't changed too much," said Alex Hill, head of corporate FX at NZForex. The market sees only a 4.5 per cent chance of a rate cut by February, when the Reserve Bank releases its next monetary policy statement.

Wellington's CentrePort today suspended operations until further notice as it deals with damage to its buildings and liquefactio. "We have sustained damage to buildings and the port and also some liquefaction and differential settlement in places," said CentrePort chief executive Derek Nind.

- With Businessdesk