Brokers unfazed by market dive

By ELLEN READ

New Zealand shares are continuing to hold up well against the global meltdown in world markets.

Brokers were far from despondent about a 2.7 per cent slump in prices yesterday after a volatile week, and they expect the market to settle down.

Belying its reputation as one of the world's laggards, the market has been one of the better performing in the Asian region this year, with the NZSE-40 rising 11.3 per cent to its peak of 2117.14 this week.

Markets in Singapore, Japan, Hong Kong and Indonesia are all down more than 10 per cent on the year and Australia has been flat.

Yesterday's sharp fall was the latest in a series of severe swings.

On Tuesday, the NZSE-40 rallied 2.3 per cent.

As usual, Telecom was the main culprit yesterday.

"I'm not saying it's a delayed reaction to overseas but the New Zealand market has come into some profit-taking because it does stand out quite significantly versus the other markets, which have been falling quite rapidly over the last week or two," said ABN Amro's Nigel Scott.

A slowing in portfolio rebalancing and reinvestment of money from the soon-to-be-delisted Fletcher Energy also dampened local sentiment, as did perceptions that the market was close to being fully valued.

High market turnover and activity in the past few weeks has been related to index-funds reinvesting Fletcher Energy proceeds in the market's leading stocks.

"There's been a slightly abnormal order flow over the last week or two but I do expect things to flatten out again in early April," Mr Scott said. Ellen Read and agencies