ASX rallies, NZX back in positive

LATEST: In a dramatic reversal of last Friday, shares in Australia jumped over 5 percent within minutes of the market opening, buoyed by international and domestic measures to prop up money markets.

In New Zealand, the market reversed early losses to move up 1 percent.

The benchmark S&P/ASX index 200 was up 222.6 points, or 5.6 percent to 4183 in early trading.

Financial stocks led the rally, with Macquarie Group up 325c to $31.77 and Commonwealth Bank of Australia rising 325c to $41.80.

National Australia Bank strated the day 225c higher, at $23.05.

After starting the day lower, the New Zealand market edged its way back up into positive territory by early afternoon.

The benchmark NZX 50 started the day 20.734 points down, or 0.74 percent at 2784.58, after falling 5 percent last Friday.

By midday, the index reversed early losses, to move into positive territory, up 28.7 points, or 1 percent at 2834.03.

Fletcher Building was up 24c to $6.10 at midday, after taking a battering last week. Telecom rose 1c to $2.57 at lunchtime

Banking stocks were among the gainers, with ANZ up 93c to $18.20. Westpac was up 25c to $22.45.

Fisher and Paykel Appliacnces rose 3c to $1.38, trimming losses early in the session

Techonology stock Rakon was down 5c at $2.00, with Contact Energy down 4c at $7.160.

After a volatile week, the New Zealand dollar was trading at US61.22c in early afternoon, gaining slightly from the morning when it traded at US60.19c.

Prime Minister Helen Clark revealed yesterday that the Government will guarantee all savers' deposits, taking on a liability worth up to $150 billion to reassure local investors spooked by the worsening international crisis.

The government's contingent liability in guaranteeing savings deposits was huge "but it just wont be called upon," Reserve Bank Governor Allan Bollard says.

The likely liability, he said, was "very very small".

Speaking on Radio New Zealand's Morning Report he said the bank deposit government guarantees will not lead to a flight of cash between institutions with the guarantee and those without.

Australia also announced similar measures in a move to prop up badly shaken investor confidence.

Under the Australian plan, all deposits in the country's banks, building societies and credit unions, would be guaranteed by the Australian government for the next three years, Australian Prime Minister Kevin Rudd said.

On the heels of a panic-riddled week that caused the Dow industrials and the S&P 500 to plummet for eight days in a row, finance ministers and central bankers from the Group of Seven met on Friday followed by meetings of the Group of 20, International Monetary Fund, World Bank officials and European leaders over the weekend to discuss jammed credit markets and the staggering global economy.

The leaders of the 15 eurozone nations have agreed in Paris on a joint strategy today to bolster market confidence by underwriting inter-bank loans and safeguarding financial institutions from collapse.

"The crisis has over the past days entered into a phase that makes it intolerable to opt for procrastination and a go-it-alone approach," French President Nicolas Sarkozy said.

US stock futures rose on Sunday evening trading on the prospects of further aid to badly rattled money markets.

S&P 500 futures rose 29.8 points. Dow Jones industrial average futures rose 252 points, and Nasdaq 100 futures climbed 31.25 points.

- © Fairfax NZ News