NZ sharemarket firm early

Wednesday 16th March 2011

The New Zealand sharemarket started firmly, after yesterday's sharp fall amid aggressive selling on world markets as Japan's nuclear crisis deepened.

While the latest day's trading wiped about US$625 billion in value in global stocks as fear spread across financial markets, the NZX-50-index rose in early trading to be up 8.87 points to 3323 around 10.20am.

Telecom (NZX: TEL ) shares were up 2.5c to $2.00, Fletcher Building (NZX: FBU ) lifted 6c to $8.72, Pumpkin Patch (NZX: PPL ) gained 4c to $1.30, and Contact Energy (NZX: CEN ) edged up 1c to $5.84.

Sky City (NZX: SKC ), which was ex an 8c dividend, was down 8c early to $3.30, Mainfreight (NZX: MFT ) fell 6c to $8.59, Nuplex (NZX: NPX ) - ex a 10c dividend - lost 6c to $3.06, Freightways (NZX: FRE ) was down 4c to $3.05, and OceanaGold (NZX: OGC ) lost 17c to $3.03 after gold prices fell as the worldwide equity selloff forced speculators to sell bullion to cover equity losses.

European shares closed at their lowest in 3-1/2 months, and Japan's Nikkei average sank 10.6%, marking its worst two-day sell-off since 1987 after reports of rising radiation near Tokyo rattled investors.

In the US, Wall Street dropped steeply before bouncing back.

The futures market, which can indicate how stocks will perform, looked so ugly before trading began that the New York Stock Exchange invoked a special rule to smooth volatility.

In addition to Japan, investors on Wall Street fretted about the Middle East, where Saudi Arabian troops moved into Bahrain and Libya's oil exports ground to a halt because of the rebellion against leader Muammar Gaddafi.

Stocks pared earlier losses after the Federal Reserve said that the US economy was on "firmer footing".

The Dow Jones industrial average closed down 1.1% at 11,855.42, the Standard & Poor's 500 Index fell 1.1% to 1281.87, and the Nasdaq Composite Index was down 1.3% to 2667.33.

NZPA

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