NZ Shares: Market initially bouyant, but slide in early trade

Some shares on the NZX were holding up well in early trade today as investors looked to speculation that the American economy may be thrashing around in a trough and getting closer to showing signs of growth.

The benchmark NZX-50 index initially looked buoyant, up 18.24 points (0.7 per cent) at 2634.49.

By 10.20am it had dropped back to 2628.17 points, only 11.922 points above Thursday's close, as the market awaited the latest statistics figures that showed the NZ economy shrank 0.9 per cent in the fourth quarter, slightly worse than predicted.

The NZX-50 is now at 2621, up five points

GDP figures show - not unexpectedly - the fourth consecutive quarter of economic contraction.

Turnover at that point of the morning was worth $13.95m, on volume of 5.17m shares.

Some of the companies which took a bit of punishment yesterday were being viewed more favourably today in light of the optimism on Wall Street. In the wake of yesterday's flurry of trading in Telecom, when stocks worth nearly $20 million changed hands and its share price slipped 5c, the shares clawed most of that in early trade to reach $2.34.

Auckland Airport recovered half the value it lost yesterday, climbing 1c to $1.71.

And Fisher & Paykel Appliances - which had a good day when it lifted 8c (19 per cent) on Thursday - today rose a further 3c to 54c on the back of optimism about prospects for a capital raising .

But Nuplex - up 15c yesterday after sorting out the terms of its fraught share issue - fell 8c early today to 95c.

Contact Energy clawed back 2c on its drop yesterday, but that only brought it back to $5.81, down on the $6 level around which it has been fluctuating.

The Hallenstein Glasson Holdings clothing chain was at $2.30 as it disclosed a 41 per cent drop in interim profit.

Pike River Coal was at 86c, as investors eyed its plans for a rights issue to pay for expensive Australia technology repairing its collapsed ventilation shaft.

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In the USA stocks rallied for a second straight day on Thursday, taking the Nasdaq back into positive territory for the year-to-date.

Stephanie Giroux, chief investment strategist at TD Ameritrade in Jersey City, said the fact that collectively investors were starting to see things less negative was "very significant".

The Dow Jones industrial average jumped 174.75 points, or 2.25 per cent, to 7,924.56. The Standard & Poor's 500 Index spiked 18.98 points, or 2.33 per cent, to 832.86. The Nasdaq Composite Index surged 58.05 points, or 3.80 per cent, to 1,587.00.

Investors bet on an improving outlook, taking the S&P 500 up 23.1 per cent since it hit a 12-year low on March 9 - signalling that index could have its biggest monthly gain in 22 years.

NZPA