Aug 21 - Open: Market rebound continues at slower pace

Yesterday's relief rally continued this morning when the sharemarket reopened.

The market bounced 2.3 per cent yesterday after six down sessions saw it shed over 7 per cent in value.

Wall Street ended firmer today after another wobbly session.

Markets around the world followed Wall St's lead on Friday after the US Federal Reserve cut the discount rate for loans to banks, in an effort to stabilise credit markets.

Today, the NZSX-50 benchmark index was up 12.72 points to 3995 at 10.05am.

US blue-chip stocks rose overnight after reversing direction in the last hour as the flight to safety in the short-term Treasury bills flagged, suggesting concerns over the stability of credit markets were receding.

The US Federal Reserve's surprise move on Friday to cut the discount rate on its loans to banks rippled across time zones yesterday, starting in New Zealand. Benchmark indices in Japan and Europe rebounded as investors weighed the chance of more action by the Fed.

The Nikkei average jumped 3 per cent – its biggest one-day percentage gain in 13 months while Britain's FTSEurofirst 300 index advanced 0.6 per cent to close at 1481.90.

Still, US short-dated Treasury security prices gained as credit concerns lingered and investors bet that the Fed's action on Friday meant it will cut the fed funds rate target for overnight interbank loans sooner rather than later.

The Dow Jones industrial average rose 42.27 points, or 0.32 per cent, to end at 13,121.35. The Standard & Poor's 500 Index edged down 0.39 of a point, or 0.03 per cent, to 1445.55. But the Nasdaq Composite Index gained 3.56 points, or 0.14 per cent, to close at 2508.59.

Turnover was moderate at $37m.

Telecom rose 4c to 420 to add to yesterday's 7c recovery.

However, No 2 stock Fletcher Building, which has been hit hard during the market's month-long correction, was down another 1c to 1133.

Elsewhere in the top 50, stocks were mixed. Air NZ was down 5c to 230, Infratil was up 4c to 287, Hallenstein Glasson was down 5c to 440 and AMP was up 23c to 1138.

Mainfreight was untraded after it reported a net first quarter profit of $67.3 million, of which $61.2 million was from the sale of two business units.

Excluding abnormals and divested operations, the net surplus was $5.8 million compared to $5.5 million in the same quarter last year.

Finance company Dominion Finance was down 10c to 170 as concerns about finance companies gathered pace. Dominion Pacific was down 6c to 108.

Yesterday, vending technologies company VTL was suspended after telling the stock exchange it was insolvent following the collapse of its finance arm, Nathans.

- NZPA