NZ sharemarket falls after OCR announcement

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The New Zealand sharemarket fell in early trade after the Reserve Bank left the official cash rate unchanged at 2.5 per cent, but sounded more upbeat than some economists had been expecting.

There was some indication rates could rise by the end of the year, which is earlier than many forecasters have been expecting.

Around 10.20am the benchmark NZX-50 index was down 20.37 points, or 0.58 percent, to 3505.02, having gained 19.8 points yesterday.

Contact Energy fell 17c to 585, after gaining 21c yesterday after selling the small shortfall in its rights issue at a premium to the issue price.

Telecom was down 3.5c to 232 early after yesterday's 5.5c gain, and Fletcher Building lost 5c to 870.

Freightways was down 6c to 341, NZ Refining Co dropped 5c to 410, and Sanford was down 5c to 535.

In the United States, stocks extended losses for the sixth straight day as investors worried that a slowing economy could deepen the market's retreat.

The latest evidence of a slowdown came in the Federal Reserve's Beige Book, which gives an anecdotal report on the economy.

It reinforced Fed chief Ben Bernanke's bearish assessment on growth earlier this week.

The Dow Jones industrial average dropped 0.2 per cent to 12,048.94, the Standard & Poor's 500 Index lost 0.4 per cent to 1279.56, and the Nasdaq Composite Index fell 1 per cent to 2675.38.

The Dow, which on May 2 was up 10.6 per cent for the year when it hit its 2011 closing high, is now up just 4.1 per cent.

The S&P 500, which had climbed as much as 8.2 per cent for the year is now up just 1.7 per cent, and the Nasdaq, up 8 per cent for the year at its 2011 closing high is now up only 0.9 per cent.

- NZPA