Sharemarket opens flat

Monday 7th March 2011

The New Zealand sharemarket was flat in early trading, after Prime Minister John Key commented on the official cash rate for the second time in a week.

Many economists are expecting the Reserve Bank will cut the OCR from 3% to 2.5% on Thursday, and today Key said a cut in the rate would probably help the country.

The NZ dollar fell toward US73.40c after the comment, but by 10am had dragged itself back to around US73.65c.

Around 10.20am the benchmark NZX-50 index was up 0.65 points to 3418.75, having gained 20.8 points on Friday.

Mainfreight (NZX: MFT ) was up 8c to $8.20 after announcing it had signed a deal to buy Netherlands-based Wim Bosman Group for 110 million euro.

Sky TV (NZX: SKT ) was up 3c to $5.58, Pumpkin Patch (NZX: PPL ) gained 2c to $1.30, Fisher & Paykel Healthcare (NZX: FPH ) was up 2c to $3.04, and Fletcher Building (NZX: FBU ) added 2c to $3.04.

Contact Energy (NZX: CEN ) lost 3c early to $6.05, Air New Zealand (NZX: AIR ) was down 2c to $1.27, and Telecom (NZX: TEL ) slipped 1c to $2.15.

In the US, Wall Street erased most of its weekly gains on Friday (local time) as fears of more geopolitical turmoil and higher oil prices threaten to stifle rallies in coming weeks.

The worries overshadowed strong labour market news. US unemployment fell below 9% for the first time in nearly two years, but investors quickly turned to focus on intensified fighting in Libya and simmering unrest throughout the region.

The Dow Jones industrial average was down 0.7% at 12,169.88, the Standard & Poor's 500 Index was down 0.7% at 1321.15, and the Nasdaq Composite Index was down 0.5% at 2784.67.

For the week, the Dow rose 0.3% and the S&P and the Nasdaq both gained 0.1%.

NZPA

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