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The New Zealand sharemarket dropped almost 1 per cent yesterday - despite Wall St recovering overnight from last week's big falls.
Wall St rebounded as investors shook off fears about tight credit and economic turmoil that had prompted heavy losses on global markets in response to last Friday's dizzying decline in New York.
Sellers on the local market played catch-up after the long weekend following big falls on the ASX and Asian markets on Monday.
The NZX-50 shed 41.6 points to close at 4274.69.
Hamilton Hindin Greene broker James Smalley said local shares suffered a delayed hangover from the hit global markets took on the back of the Dow Jones "Grey Friday" - the 20-year anniversary of the 1987 share market crash.
Smalley described the muted reaction as "an orderly retreat".
First NZ Capital broker Barry Lindsay said he had thought the Labour Day closure of the New Zealand markets would mean a focus on the overnight recovery of the US markets rather than dwelling on Friday's hefty loses.
Instead the New Zealand market has reflected both events, he said.
"It's kind of a halfway house," Lindsay said.
He said sharp sell-offs one day followed by a strong recovery had been a feature of trading this year.
"I tend to think that's what is going to happen this time as well."
Lindsay said volumes were fairly ordinary once the effect of Graeme Hart selling his 20 per cent stake in Goodman Fielder was taken out of the equation.
A portion of that stock was placed into New Zealand investors hands at a price of $2.52, accounting for more than a third of the day's trading volume.
Both brokers agree low turnover reflected an absence of market news.
Bargain hunters in the US were out in force, snapping up shares in the sectors hardest hit during last week's slump, such as home builders, banks and retailers.
Technology stocks, along with the health-care sector, are seen as posting the biggest year-on-year earnings growth in the third quarter. Tech stocks emerged largely unscathed from a dramatic sell-off on Wall St last week.
The Dow Jones Industrial Average gained 50.48 points (0.37 per cent) to 13,572.50 at the closing bell, coming back after five losing sessions last week that dragged the blue-chip index down more than 4 per cent.
Australian shares followed the US lead, with the ASX-200 closing up 83.6 points at 6660.9.
The New Zealand dollar regained to reach US75c at the close yesterday.
It had fallen below US73.70c as the US currency rebounded from an all-time low against major currencies.
* additional reporting from Agencies
