Confidence trickles back into market

By LIBBY MIDDLEBROOK

The New Zealand stock exchange experienced its first millennium upswing yesterday as investor confidence trickled back into the market.

The Top 40 Capital Index was up 1 per cent to 2145.

The previous two days' trading had been depressed by the expectation that United States Federal Reserve chairman Alan Greenspan will push up interest rates in February to counter an inflationary trend resulting from record low unemployment.

Rob Gwyther, of stockbrokers J. B. Were, said trading in Telecom shares by foreign investors was reasonably strong late yesterday afternoon, pulling back the share price to $8.70 at closing from lows of $8.51 earlier in the day.

About 3.6 million shares were traded during the day.

"The market's still a bit thin, so those sorts of orders can sway the market quite easily," said Mr Gwyther.

New Zealand shares also responded positively to stronger trading in Asian markets, where Hong Kong's Hang Seng Index was up 1.2 per cent to 15340 at mid-day.

In Australia resource stocks again set new highs on the expectation that the demand for metals will rise this year. BHP added $1 to $A21.36 while Rio Tinto added $1.46 to $A33.26. The All-ords rose nearly half a per cent to 3044.5

Market analysts said stabilising US markets on Thursday also improved investor confidence.

New York's Dow Jones gained 1.17 per cent but the technology rich Nasdaq continued to take a pounding, closing a further 3.8 per cent down.