KEY POINTS:
Despite the worst Quarterly Survey of Business Opinion in decades and softer sessions on world equity markets, the New Zealand sharemarket was little changed yesterday, with analysts saying investors here had already priced in the grim outlook.
Yesterday's woeful QSBO came as global markets fell as investors braced for the latest United States earnings season amid fears the financial crisis and recession are hurting corporate profits more than previously expected.
The US Dow Jones industrial average was down 95.98 points, or 1.1 per cent, while the broader Standard & Poor's 500 index fell 15.76 points, or 1.8per cent.
However, the NZX-50 closed slightly up yesterday, rising 6.37 points or 0.2 per cent to 2774.64, despite the QSBO indicating businesses are at their most pessimistic in decades.
First NZ Capital research manager Barry Lindsay said with the local market having lost the best part of 40 per cent of its value in little more than a year, investors had largely now priced in expectations of hard economic times.
He believed the market was a far more forward looking indicator than the QSBO which, despite asking correspondents about their expectations for coming months, was largely a snapshot of opinion taken a few weeks ago.
"I don't think the market is generally reactive to the QSBO. It just really confirms what is happening in the market every day, which is people voting on the future," said Lindsay.
"It is quite grim but confirms what many investors already understand to be the case, we are in a recession that's at present somewhat entrenched."
As far as the local equity market went, Lindsay said the survey's negative tone was probably somewhat offset by the increased prospect of more aggressive easing by the Reserve Bank which should, in theory, provide some support to shares.