KEY POINTS:
Immediate fears of more New Zealand sharemarket losses after last week's US market meltdown dissipated somewhat yesterday with the benchmark index easing just slightly in relatively light trade.
The NZX-50 closed 17 points or 0.41 per cent lower at 4228.8, in a marked slowdown from Friday's 2 per cent drop.
"The sky is not falling," said Hamilton, Hindin, Greene broker Grant Williamson. "Quite frankly I think it's been a major over-reaction.
"What investors need to realise is these markets are just a fraction off their all-time highs. We've had a very good three or four years, but domestic factors are starting to hinder our market now with the currency and interest rates."
Selling yesterday and on Friday was largely down to investors looking to lock in profits at favourable levels.
"We are having a correction and there does appear to be some credit problems in the US, but to date, that hasn't really flowed through to the New Zealand and Australian markets."
ABN Amro Craigs retail adviser Nigel Scott said losses over the past two sessions were roughly equal to the preceding 10 days' gains.
The market's response had been "considered".
"I see very little panic selling. Fear and greed are running about equal."
Trading volumes were relatively light apart from a few off-market trades.
"Investors are very much in a wait-and-see mode on the fall-out from sub-prime."
Fisher & Paykel Healthcare, which earns much of its profits in US dollars, appeared to benefit from the lower currency yesterday, gaining 18c to close at $3.44.
