KEY POINTS:
A surprise fall in employment today brought forward forecasts for a cut in Reserve Bank interest rates, sparking a remarkable turnaround in the sharemarket.
News of 29,000 jobs lost in the March quarter, the worst loss since 1989, instead of the no-change expected, prompted the biggest rally on the money market in more than two years, and pushed the New Zealand dollar to three-month lows.
Expectations are now growing for a cut in the Reserve Bank's Official Cash Rate (OCR) as soon as July, instead of the end of this year or early 2009, to help stimulate the economy.
The NZSX-50 benchmark index, which yesterday fell 54 points, closed up 28.8 points, or 0.8 per cent, at 3625.6. The index's 61-point range echoed Australia's 141-point swing, with the S&P/ASX 200 Index recovering after reassuring comments from two major banks.
Turnover was a light $75.5 million.
"(There was ) deterioration again in some of those retail stories, that's obviously a sector that's going to be pretty tough, and clearly on a day-to-day basis the economic outlook here will remain pretty subdued," said Nigel Scott, of ABN Amro Craigs.
"But for a lot of the local equities, we may see over the next couple of quarters the benefits of the New Zealand companies having invested offshore over the last couple of years."
Top stock Telecom led the charge higher, rising 12c, or 3 per cent, to 397, but blue chips were generally mixed.
Contact Energy dipped 3c to 903, Fletcher Building gained 11c to 848, Fisher & Paykel Healthcare was flat at 260, and F&P Appliances lost 4c to 265.
Sky City was up a cent at 397, Sky TV down a cent at 446, Auckland Airport 4c higher at 220, and Infratil up 3c at 228.
Briscoe Group was down 2c at 110 but recovered from an earlier four-year low of 105. The small-cap retailer fell 11 per cent yesterday after reporting a 10 per cent fall in April quarter same store sales.
Among other retailers, Postie Plus fell 3c to 46, Smith's City fell 2c to 46, Michael Hill International fell 4c to 85 and Pumpkin Patch, which fell 9c yesterday, was flat at 175.
Hallenstein Glasson, which lost 5c yesterday, was down 4c at 351 while The Warehouse, which lost 12c yesterday, dipped a further 14c to 550.
Freight and logistics firms Mainfreight and Freightways, which received a boost from Toll's sale of the railways to the Government on Monday, both retreated - Freightways down 5c to 330 and Mainfreight down 20c to 675.
Seafood exporter Sanford jumped 18c to 455, Rakon was up 4c at 317, and PGG Wrightson was up 4c at 207.
Among dual-listed stocks, ANZ was up 50c at 2750, Westpac rose 70c to 3070, Lion Nathan was up 12c at 1007, and AMP jumped 23c to 900.
Earlier on Wall Street, the key indices lost between 1.59 per cent and 1.81 per cent as oil prices soared to fresh record peaks above US$123 ($159) a barrel, renewing fears about inflationary pressures.
- NZPA
