Market responds to US sentiment

By Phil Boeyen, ShareChat Business News Editor

Tuesday 18th September 2001

The New Zealand market improved early Tuesday, taking heed of the relative resilience of the US overnight.

Following heavy selling last week and again on Monday, NZ investors are buying back oversold stocks, although they are taking a conspicuously sectoral view as they continue to weigh which industries are likely to bear the long-term brunt of the terrorism fallout.

In the US the airline, insurance and leisure sectors in particular have been hit, dragging down the Dow Jones by 7.1%, its lowest level in three years.

Market commentators admit it was a serious blow but not as bad as many were predicting.

The damage was partly held in check by interest rate drops of 50 points in both the US and Europe as a concerted effort is made to cushion the world's economy.

By 10.30 am Tuesday the NZSE40 was up almost 30 points or 1.5% on Monday's close to around 1820, however it has a way to go to regain the falls of previous days.

Telco stocks were marked up with both Telecom (NZSE: TEL) and Telstra (NZSE: TLS) recording rises, and Sky City (NZSE: SKC)also appears in recovery mode.

Even Air NZ A (NZSE: AIRVA) have shares perked up a little after Monday's meltdown.

However there is still a strong sense of uncertainty in the markets and they are likely to remain in relative limbo as US plans to tackle the terrorists are played out.

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