NZ stocks: Stocks rise, but miss most of US euphoria

The New Zealand sharemarket rebounded yesterday after a surprise rate cut by the US Federal Reserve.

The benchmark NZSE-40 index closed up 24.35 points - 1.3 per cent - at 1899.53, while the NZSE-10 gained 15.66 points - 1.95 per cent - to 818.15.

The half a point cut was decreed between the normal US central bankers' meetings - hinting at a more rapid than expected slowdown in the US economy, and was greeted positively by US and global markets.

In the United State, the tech-oriented Nasdaq market posted its highest gain in point and percentage terms since the market was founded in 1971, closing up 324.83 points - 14.17 per cent - at 2616.69.

Local reaction to the cut was led by Telecom and Fletcher Energy.

After a shaky start to the new year, Telecom closed up 20c at $4.77 on turnover of 4.99 million shares valued at $23.71 million. Telstra put on 7c to $8.27.

Fletcher Energy added 10c to its value at $8.26 on trade worth $29.31 million.

Rises outnumbered falls by 61 to 23 among the 122 stocks traded.

Outside of the main stocks, trade was light, a quiet post-Christmas market totalling only 16.62 million shares valued at $72.36 million.

Cavill White Securities principal Don Turkington suggested the summer holiday season was behind the muted response.

If the US held its gains, a bigger rise could come today, he said.

Other stocks to gain included the Warehouse, up 10c to $6.10, Sky City up 3c to $8.16, Brierley Investments, up 2c to 30c and Sky TV, up 2c to $3.05.

National Mail, despite its recent woes, jumped 4c to 15c.

The US Fed has suggested its next meeting in late January could also produce a rate reduction but probably only by a quarter of a percentage point rather than yesterday's half point.

- NZPA