Market up 1.1 pc

Monday, 08 September 2008

September 08 – Close: Equities markets around the world surged today in anticipation of a rally on Wall Street after the United States government seized control of mortgage finance companies Fannie Mae and Freddie Mac.

The New Zealand market joined in but not to the extent of other Asian markets. At one point the Australian market was up 4 percent but the benchmark NZX-50 index closed up 38.226 points to 3374.404, equal to a 1.146 percent rise.

"Basically financial markets have taken the lead from more certainty in the US financial sector," ABN Amro Craigs senior dealer Bryon Burke said.

The other markets rose more because they have more financial listings.

Futures contracts suggested that the Dow is likely to rise strongly and markets took their lead from that.

"Last time there was a bailout the US equities market rallied," Mr Burke said.

Top stock Telecom was again disappointing, ending unchanged at 315 in the rising market. Contact rose 35c to 871 after parent Origin Energy Ltd surged as much as 27.7 percent after US energy giant ConocoPhillips agreed to pay up to $A9.6 billion ($NZ11.99 billion) for a 50 percent stake in a joint venture project.

The strong New Zealand dollar took the gloss off export stocks. Fisher & Paykel Healthcare fell 6c to 318 and the appliances stock eased 2c to 178.

Fletcher Building rose 14c to 769.

PGG Wrightson eased 17c to 255 after farmer shareholders in the Silver Fern Farms voted in favour of selling a 50 percent stake in their cooperative to PGG. PGG confirmed capital raising plans.

Infratil eased 6c to 217 and Tower eased 1c to 209. The Warehouse rose 1c to 323 and SkyCity rose 8c to 385. TrustPower rose 17c to 807.

Volume was worth $72.44m.

On Friday (local time) US stocks reversed a steep selloff to end mostly higher, as fears about a jobs report gave way to bargain hunting in sectors including financials and consumer staples.

The Dow Jones industrial average rose 0.29 percent to settle at 11,220.96, although the blue chips had been down 150 points at one stage. The Standard & Poor's 500 index rose 0.44 percent to 1242.31, while the Nasdaq composite index fell 0.14 percent to 2255.88.

NZPA