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NZ Shares Rise Early After Fed Surprise Lifts Wall Street

Fuseworks Media
Fuseworks Media

Wellington, March 19 NZPA - The New Zealand sharemarket gained in early trading after equities surged in the United States on a surprising statement from the Federal Reserve.

The Fed said it would buy long-term Treasury bonds for the first time in four decades in an effort to revive the recession-hit economy.

In this country the benchmark NZSX-50 index was up 9.79 points to 2616.11 around 10.15am, following a 41.6-point rise yesterday.

Fletcher Building was dragging on the market, with a 20c fall to 585, partly reversing its 35c lift yesterday.

Among other leading shares, Contact Energy rose 7c to 601, on top of a 19c lift yesterday, while Telecom was unchanged early on 240 after gaining 5c yesterday.

Other shares to rise early included The Warehouse, up 6c to 356, Auckland Airport up 2c to 176, Rakon up 2c to 130, and Sky City up 2c to 280.

Shares falling early included Fisher & Paykel Healthcare down 7c to 322, Cavalier Corporation down 6c to 174, and NZ Refining Co down 3c to 732.

In the US, shares of financial companies and home builders gave the market some of the biggest lifts as investors bet that the Fed's move would kick-start lending.

"It potentially has the opportunity to lower mortgage rates, which would widen the potential pool of buyers for homes," said Bucky Hellwig, senior vice president at Morgan Asset Management in Birmingham, Alabama.

The Dow Jones industrial average gained 1.2 percent to 7486.58, the Standard & Poor's 500 Index advanced 2.1 percent to 794.35, and the Nasdaq Composite Index rose 2 percent to 1491.22.

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