Firm start by NZ sharemarket

The New Zealand sharemarket started the day firmly after world stocks posted their biggest one-day gain in nearly a month with shares at attractive levels following recent drubbings.

Today's early gains in this country follow a late surge on the NZX yesterday after the Reserve Bank of Australia left interest rates steady at 4.5 per cent, saying policy was appropriate given caution in global markets even as it remained optimistic about the outlook for Asia and the domestic economy.

Among other information before investors was a weak result at Fonterra's online dairy product auction overnight, where average prices were down 13.7 per cent from a month earlier.

Around 10.15am the benchmark NZX-50 index was up 16.57 points to 2968.97, on top of a gain of 5.1 points yesterday.

Nuplex lifted 15c to $3.00, Contact Energy was up 5c to $5.88, Telecom gained 4c to $1.87, Port of Tauranga was up 3c to $6.68, Pike River Coal lifted 3c to 96, Hallenstein Glasson added 3c to $3.78, and Fletcher Building lifted 3c to $7.66.

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In the United States, global equity gains were tempered late in the US trading day as a slowdown in growth in the US service sector weighed on sentiment. Worries about the possibility of a double-dip recession, which have been dogging financial markets, persisted.

"A lot of people got excited about how cheap things have gotten," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

"Absolutely nobody believes in the rally, at least the ones we'll be seeing for now. The market sentiment is bearish and there is no doubt that the economic recovery is slowing down."

The Dow Jones industrial average rose 0.6 per cent to 9743.62, the Standard & Poor's 500 Index gained 0.5 per cent to 1028.06, and the Nasdaq Composite Index edged higher by 0.1 per cent to 2093.88.

- NZPA