The updraft from a resurgent US sharemarket which lifted other markets around the Asia/Pacific bypassed the local market yesterday, with the NZX-50 barely closing in the black.
On Monday news of a surprise rebound in existing home sales in the US added to strengthening sentiment on Wall Stafter banking giant JPMorgan Chase agreed to increase its offer for Bear Stearns from US$2 to US$10 a share.
The Dow Jones Industrial Average and S&P 500 both gained 1.5 per cent, while the Nasdaq was up 3 per cent.
Australian shares followed suit with a strong rally sending the ASX-200 up 190.9 points, or 3.72 per cent, to 5318.4, driven largely by big gains in the bank stocks. Elsewhere, Japan's Nikkei average was up 2.1 per cent and Hong Kong's Hang Seng was up nearly 5 per cent in trading last night.
In New Zealand, however, the benchmark NZX-50 closed just 4.57 points, or 0.13 per cent, higher at 3430.28, having managed to clamber as high as 3450 during the session. "I'm a tad surprised," said UBS managing director Campbell Stuart. "Our market doesn't tend to react with the same volatility we've seen elsewhere, but it is a disappointing result."
Turnover was a respectable $138 million, but Stuart said order flow on the sell side outweighed that on the buy side.
A contributing influence was probably the lack of financial stocks on the local market, which would have benefited from the news from Wall St.
"I think also New Zealand is not flavour of the month at the moment in a relative sense."
Local sentiment was probably also hampered by a gloomy consumer confidence report.
"Subject to flow tomorrow we could easily be up a per cent and a half. It's just one of those things," said Stuart.
The rally in overseas markets did spark demand for the New Zealand dollar, though, with the kiwi rising the best part of one and a half cents from Friday, closing at US80.15c.
