KEY POINTS:
After a positive start to the week's trading, the New Zealand stock exchange has lost ground in late afternoon trading, with the benchmark NZX-50 index down 0.2 per cent.
The exchange opened down slightly, after Prime Minister Helen Clark announced yesterday the Government was moving to guarantee all bank deposits for two years, for banks which opt into the scheme.
The Government's liability could be up to $150 billion.
Finance Minister Michael Cullen said New Zealand had been in the uncomfortable position of being the only western country not offering any guarantee on deposits.
The benchmark NZX-50 index was recently down 6 points to 2799, after earlier today being up 1.5 per cent.
Top stock Telecom is down 4 cents to $2.52, while Contact Energy is down 12 cents to $7.08.
Shareholders in Fletcher Building enjoyed a 32c jump in the value of their shares at one stage today - an increase of more than 5 per cent.
But many of these gains have been wiped off in late trading, with Fletcher Building shares now changing hands at $5.95, a 9 cent gain.
United States equities ended last week with the Dow Jones industrial index lurching back and forth in a 1000-point range. Volume on the New York Stock Exchange was more than double the average of 2008 so far.
"A lot of people look at this crazy selling and believe we are forming a bottom, particularly when you have all this despondency, capitulation and utter despair.
"But then...people are still scared and selling," said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas.
On Friday (local time) the Dow Jones industrial average fell 1.49 per cent to 8451.19, while the Standard & Poor's 500 Index dropped 1.18 per cent to 899.22, although the Nasdaq Composite Index edged up 0.27 per cent to 1649.51.
For the week, both the Dow and the S&P 500 fell 18 per cent, while the Nasdaq slid 15.3 per cent.
Traders cited margin calls and forced liquidations as a key contributor to the week's sell-off in stocks.
During the weekend, leaders of the 15 eurozone nations agreed in Paris on a joint strategy to bolster market confidence by underwriting inter-bank loans and safeguarding financial institutions from collapse.
In Washington, US President George W Bush met G7 economic chiefs and officials from the IMF and World Bank, but they failed to agree on concrete measures to end the crisis.
- NZPA
