Market rallies but still at lowest in months

The New Zealand sharemarket finished off its day's lows, helped by a rebound on the Australian market, but still ended the week at its lowest level in nine months.

The benchmark NZX-50 index, which has been on a downward slide for the last month, closed 61.32 points or 1.97 per cent down at 3050.08. Overall there were just 10 rises and 87 falls among the 112 stocks traded. Turnover was high at $120.71 million.

James Lee of First NZ Capital said the Australian market turned around this afternoon on the back of a rumour that the Reserve Bank of Australia had intervened to support the aussie dollar.

"That's led to a big turnaround in the Australian dollar and in general currencies lead risk appetites so it is leading the sharemarket," he told NZPA.

The Australian market was down 3 per cent at one point today but as the New Zealand market closed, it was about half a per cent down.

The NZX-50 index sank as much as 2.6 per cent before its late rally.

"We were seeing a pretty strong bounce in the Asian markets, particularly in Australia," said Grant Williamson of Hamilton, Hindin, Greene.

"These markets look well oversold and overdue for a relief rally."

The only New Zealand company in the top 50 stocks to end the day in positive territory was Pike River Coal, up 2c to 105, after announcing its $90m capital raising has been successfully completed.

Mr Williamson said Rakon's full year result today - with an improved second half and outlook - would have seen its stock price rise on another day but today it finished 3c lower at 97.

On a bright note elsewhere Comvita, which declared a 6c dividend on top of a six-fold increase in tax paid annual profit, jumped 15c to 250.

But market leader Telecom slipped below the 200 level for the first time, falling 6c on the day to 199.

Fletcher Building slid 19c to 787 and Contact Energy fell 9c to 595.

Other falls included Hallenstein Glassons down 10c to 331, Mainfreight 23c to 601, NZX 5c to 165, Michael Hill 3c to 68, Property for Industry 3c to 114, Pumpkin Patch 9c to 205 and SkyTV 9c to 464.

Unchanged at the end of the session were The Warehouse at 360, NZ Farming Systems at 40 and ING Property at 73.

US stocks dropped overnight, driving the Dow and the S&P 500 down more than 3 per cent and pushing the Nasdaq down more than 4 per cent, on growing fears that the euro zone's handling of its sovereign debt crisis could jeopardise the global economic recovery.

Japan's Nikkei average ended the day down 2.5 per cent at 9784.54, its lowest close in more than five months.

- NZPA