Sharemarket flat after OCR left at 3%

Thursday 9th December 2010

The New Zealand sharemarket was flat in early trade after the Reserve Bank left the official cash rate unchanged at 3%, noting that the pace of economic growth appeared to be moderating.

But Reserve Bank Governor Alan Bollard also said that beyond the near term, higher export volumes and repairs following the Canterbury earthquake were expected to push growth above levels that had been expected previously.

The New Zealand dollar lost two-thirds of a cent against the greenback within 15 minutes of the 9am announcement, dropping to around US74.35c before recovering some ground to be around US74.60c by 10am.

Around 10.15am the benchmark NZX-50 index was down just 0.5 of a point to 3293.83, after yesterday gaining 12.5 points.

Trustpower (NZX: TPW ) was down 5c to 725, Nuplex (NZX: NPX ) lost 2c to 350, and Wellington retailer Kirkcaldie & Stains (NZX: KRK ) lost 5c to 245, while Methven (NZX: MVN ) lifted 2c to 164.

In the US, stocks ended up slightly, with the Standard & Poor's 500 Index closing at its highest level since September 2008, as gains in financial and technology stocks offset declines caused by a recent surge in bond yields.

Based on preliminary data, the Dow Jones industrial average gained 0.1% to end unofficially at 11,372.48, the S&P 500 rose 0.4% to 1228.26, and the Nasdaq Composite Index advanced 0.4% to 2609.16.

NZPA

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