NZX claws back ground lost in week of turmoil

The NZX-50 still sits more than 7 per cent below where it was in May. Photo / APN

The NZX-50 has recovered almost all the ground it lost during the turmoil that hit global equity markets last week.

The benchmark index yesterday rose above 3276.51 - where it opened last Monday, following Standard & Poor's announcement that it would cut the United States' credit rating, prompting a volatile few days on exchanges around the world - before falling back to close up 0.65 per cent at 3273.75.

The NZX-50 still sits more than 7 per cent below where it was in May.

Grant Williamson, a director at Christchurch sharebrokers Hamilton Hindin Greene, said financial results reported on Monday by exchange operator NZX and courier firm Freightways had buoyed the local market.

"It's been quite a turnaround," he said. "The local results that we have seen so far have been very positive and I think they are bringing a level of confidence back into the marketplace."

New Zealand's largest listed firm, Fletcher Building, reports its full-year result today, while Telecom reports its annual financials on Friday.

Yesterday's NZX-50 rise followed rebounds on European and US exchanges, as markets reacted positively to news that Japan's economy shrunk less than expected following this year's earthquake and tsunami.

Google's announcement that it would spend US$12.5 billion ($15 billion) acquiring mobile firm Motorola Mobility also resulted in positive market sentiment.

The Dow Jones industrial average finished Monday up 1.9 per cent at 11,482.90. The Dow has gained 763 points since Thursday - its best three-day point gain since it rose 927 points in November 2008, during the depths of the financial crisis.

Williamson said the issues that caused last week's turbulence had not gone away and more bad news on European debt or the US economy could send markets back into panic mode.

Australia's benchmark S&P/ASX200 index closed down 0.83 per cent at 4247.3. In Japan the Nikkei 225 index rose 0.2 per cent to finish the day at 9107.43, while Hong Kong's Hang Seng closed down 0.2 per cent at 20,212.1.Additional reporting: Agencies

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