NZ shares flat after OCR left unchanged

File photo / Paul Estcourt

The New Zealand sharemarket was flat in early trading after Reserve Bank Governor Alan Bollard surprised no one by leaving the official cash rate unchanged at 3 per cent.

Explaining his decision, Bollard highlighted recent economic data that was weaker than expected, while pointing to support coming from continued high export prices, and reconstruction after the Canterbury earthquake.

Among subdued early trading, heavyweight stock Fletcher Building initially gained 3c to $8.05 - partly reversing yesterday's 6c fall - but within about 10 minutes of the market opening the stock was up just 1c, to $8.03.

Telecom gained 2c early to $2.06, after falling 3c yesterday, while Contact Energy was unchanged on $5.87.

Around 10.15am the benchmark NZX-50 index was down 0.47 per cent to 3279.87, having yesterday fallen 5.1 points.

Nuplex added 2c early to $3.36, and NZX gained 2c to $1.58 having reported higher third quarter earnings after the market closed yesterday.

Fisher & Paykel Healthcare fell 4c to $3.15, Tower lost 2c to $1.86, The Warehouse was down 2c to $4.02, and Pike River Coal fell 2c to $1.03.

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In the United States, stocks fell as investors dialed back expectations of how aggressively the Federal Reserve will act to stimulate the economy.

With the uncertain outcomes of US mid-term elections and a Fed meeting next week, traders positioned themselves for more volatile markets.

Materials stocks, which have rallied in recent weeks on expectations of heavy stimulus, were the day's biggest decliners.

The Dow Jones industrial average dropped 0.4 per cent to 11,126.28, and the Standard & Poor's 500 Index lost 0.3 per cent to 1182.45, while the Nasdaq Composite Index gained 0.2 per cent to 2503.26.

The Nasdaq advanced as Broadcom Inc jumped 11.7 per cent to US$41.56, a day after it unexpectedly forecast a potential rise in fourth-quarter revenue.

- NZPA