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Shares prices retreated in early trading today after the Reserve Bank left interest rates unchanged at its six-weekly review but its commentary was seen as hawkish.
Bank Governor Alan Bollard said there were signs the housing market was moderating but noted other indicators of inflationary pressure.
"The labour market remains tight, domestic income growth continues to expand on the back of strong commodity prices, and core inflationary pressures persist," Dr Bollard said.
The NZSX-50 benchmark index was down 11.7 points to 4279.0 at 10.20am. Turnover of $47m was boosted by a line of $20m of NAB shares. Rises were outnumbered by falls 10 to 21 among the 66 stocks traded.
Telecom's 4c fall to 446 and a 5c fall to 1290 in No 2 stock Fletcher Building, which rose 16c yesterday, were mainly responsible for the index's slide.
Freightways told shareholders its net profit was on par with last year and operating earnings up 4 per cent. Its shares were untraded.
Medical supplies company Abano rose another 10c to 460 today after rising 15c yesterday after its board recommended shareholders reject a majority takeover bid from Masthead Portfolios for $3.85 a share. The share price is still below the 540c mid-point of an independent valuation.
The Warehouse rose another 4c to 569 after rising 20c in the last two days as Woolworth's and Foodstuff's High Court appeal continues against the Commerce Commission's ruling on their takeover bids for the Red Shed.
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On Wall Street, US stocks clawed their way back from steep losses that were triggered by Merrill Lynch announcing its first loss in nearly five years, on speculation that the Federal Reserve would cut the discount rate.
Earlier in the session, Merrill's loss, grim housing data and poor results from the semiconductor sector had sent the S&P 500 to its lowest level since September 18, the day the Fed last cut interest rates.
The Dow Jones industrial average fell just 0.98 of a point to 13,675.25. The Standard & Poor's 500 Index fell 3.71 points to 1515.88 and the Nasdaq fell 24.50 points, or 0.88 per cent, to 2774.76.
- NZPA