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Modest early rise for sharemarket

Thursday 28th April 2011

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The New Zealand sharemarket made modest early gains after Reserve Bank Governor Alan Bollard left the official cash rate unchanged at 2.5% and appeared comfortable with the outlook for inflation.

In his statement, Dr Bollard said the outlook for the New Zealand economy remained "very uncertain" following the Christchurch earthquake in February.

But he acknowledged that to date, activity in the rest of the country appeared relatively unaffected by the quake, with housing market turnover and business investment beginning to rise.

Around 10.20am the benchmark NZX-50 index was up 4.02 points to 3496.06, having ended up 5.6 points yesterday after reaching its highest level in nearly three years during the day.

Contact Energy (NZX: CEN ) shares slipped 1c to $5.85 in early trading after the company announced a $350 million rights offer.

Sky TV (NZX: SKT ) lifted 4c to $5.88 on light volume, while Fletcher Building (NZX: FBU ) gained 2c early to $9.16, Telecom (NZX: TEL ) added 2c to $2.13.5, and Abano Healthcare (NZX: ABA ) was up 2c to $4.52.

Sanford (NZX: SAN ) was down 5c to $5.45 and Scott Technology (NZX: SCT ) lost 4c to $1.45 on low volume.

In the US, the Nasdaq Composite Index jumped to a 10-year high as stocks rallied after Federal Reserve Chairman Ben Bernanke's first-ever press conference did nothing to short-circuit investors' optimistic outlook on the economy.

All three major US stock indexes extended gains after Bernanke reiterated the Fed's stance that inflation was a transitory problem related largely to commodity price pressures.

Tom Sowanick, chief investment officer of OmniVest in Princeton, NJ, said the Federal Reserve is "inviting asset inflation" as reflected in the stock market's price action.

The Dow Jones industrial average gained 0.8% to 12,690.96, the Standard & Poor's 500 Index rose 0.6% to 1355.66, and the Nasdaq Composite Index climbed 0.8% to 2869.88.



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