KEY POINTS:
The New Zealand sharemarket rebounded strongly today after a wild session on Wall Street that saw the United States market reverse a 2 per cent fall with a 2.5 per cent gain.
US stocks rallied late in the session, led by rising shares of financial companies on speculation about capital infusions for bond insurers.
The gains, which sent the Dow up more than 2.5 per cent, snapped a five-day string of losses.
"The Dow was up about 2 per cent, down 2 per cent and up 2 per cent so no one really knows what is going on," said NZX chief executive Mark Weldon.
The benchmark top-50 index was up 53 points, or 1.5 per cent, to 3668 at 11.25am.
Yesterday it snapped a record 14-session losing streak that saw the index plunge 10 per cent after the US Federal Reserve made a 75 basis point emergency cut to interest rates.
The local market got no help from Reserve Bank governor Alan Bollard, who, as expected, left the Official Cash Rate unchanged at 8.25 per cent at his six-weekly review and delivered a hawkish statement.
The New Zealand dollar jumped three quarters of a cent to US76.55c on the hawkish tone of Dr Bollard's commentary, which gave no indication of rate cuts ahead.
UBS broker Campbell Stuart said today's action was a relief rally that had bought some reality back to the market.
"It's good to have a few days where the market is up so you don't have everyone believing it's a one-way street."
He said investors had been spooked by media headlines.
"Some reality is coming home again."
Rises were across the board. Mr Stuart said a risk in the local market was that the shortage of scrip meant rebounds could be exaggerated.
Among the leaders Telecom was up 6c to 405, Fletcher Building up 9c to 1004 and Contact Energy up 22c to 742.
Good gainers included, Mainfreight, 16c to 586, Fisher & Paykel Appliances, 9c to 295, Infratil, 6c to 265, Fisher & Paykel Healthcare, 8c to 315 and The Warehouse, 9c to 561.
ING Property fell 4c to 102 while AMP was down 2c to 952.
Restaurant Brands rose 4c to 85c while Briscoe was up 6c to 135.
On Wall Street, news of a meeting between New York regulators, bond insurers and their customers lifted the market out of negative territory.
"The speculation that mortgage insurers could potentially get a bailout helped the market stabilise. That was enough to get the market going. There was no real silver bullet news that came through," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
The Dow Jones industrial average ended up 298.98 points, or 2.50 per cent, at 12,270.17. The Standard & Poor's 500 Index rose 28.10 points, or 2.14 per cent, to 1338.60 and the Nasdaq Composite Index rose 24.14 points, or 1.05 per cent, to 2316.41.
- NZPA
