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The New Zealand sharemarket pulled itself up from a sharp Wall St-inspired fall but, at the end of a tough day, remained 1.1 per cent down.
Earlier in the day the NZSX-50 index plummeted 2.3 per cent and the Australian market was 1.9 per cent down in early trade following a two per cent fall in the Dow Jones on Friday in response to credit concerns.
The New Zealand index recovered to a close of 4075.18, down 47.22 points on turnover of $135 million.
Stocks fell across the board, with bright spots emerging from export stocks Fisher & Paykel Healthcare, up 11c to 340, F&P Appliances up 8c to 356, and Pumpkin Patch up 3c to 333. The stocks were responding to an easing currency, brokers said.
Market leader Telecom also bucked the trend, up 3c to 435 after being sold off 15c following Friday's annual results.
"A few people think that's cheap," said ABN Amro Craigs investment adviser Paul Valk.
The telco had a better than expected fourth quarter but said next year's ebitda could fall up to 8 per cent in an uncertain regulatory climate. Mr Valk said some people believed that if the company was split in three, the parts could be worth more than the whole.
Other leading stocks included Fletcher Building, down 25c to 1225, Contact down 20c to 910, Sky City down 11c to 462 and the NZX, down 40c to 1030.
There was heavy trading in takeover target Auckland Airport, which fell 15c to 313 despite a 5.9 per cent increase in June year international traffic .
Investors were thought to be downgrading Dubai's chances following a media report quoting a senior Government minister as saying the Government was opposed to the bid.
Freightways fell 4c to 381, "a flat result" in the face of the broader market, Mr Valk said. The courier and freight company reported a record annual profit -- a 3 per cent increase in profit to $25 million , but said only 1 per cent of its 10 per cent revenue growth was organic.
Infratil, which announced a $175 million rights issue today to fund potential acquisitions, fell 10c to 280.
Falls outnumbered 95 to 24 on 159 stocks traded.
In late afternoon trade (NZ time), the Australian sharemarket was still 1.8 per cent down with Macquarie Bank Ltd leading declines and resource stocks wilting on a fall in base metal and oil prices.
In the US, stocks slid sharply on Friday after mortgage underwriter Bear Stearns said credit markets were in their worst shape in more than two decades, while jobs data aroused further concerns about weakness in the economy.
The Dow Jones industrial average tumbled 281.42 points, or 2.09 per cent, to 13,181.91, while the S&P 500 and the Nasdaq had their worst one-day percentage drops since the February 27 global equity rout.
The Standard & Poor's 500 Index dropped 39.14 points, or 2.66 per cent, to 1433.06, and the Nasdaq Composite Index sank 64.73 points, or 2.51 per cent, to 2511.25.
- NZPA