(RTTNews) - The New Zealand share market opened slightly higher on Thursday after the country’s central bank left the Official Cash Rate unchanged for a third time in a row. The higher opening was also prompted by a fourth straight session of gains made overnight on Wall Street, where the U.S. averages closed moderately higher.

Earlier in the day, the Reserve Bank of New Zealand had left the country’s Official Cash Rate (OCR) unchanged at 2.5 percent. RBNZ Governor Alan Bollard said while making the announcement the action came as monetary policy makers saw a bottoming-out of the nation’s economy. He added that rates are expected to remain at their current level, or go lower, into next year.

“There is more evidence that the decline in economic activity is coming to an end, and that a patch recovery is underway,” Bollard said in a statement. “This is partly due to recovery in our trading partner economies in the June Quarter, and these look likely to continue expanding long term.”

Bollard said the picture was not entirely rosy. “The medium-term growth outlook remains weak,” he said. “”For growth to be sustained in the medium term there is a need for improved competitiveness in the export sector and a continued recovery of household savings.”

Bollard said the policy board feels support from low rates is expected to be needed for “some time.” He said board members “continue to expect to keep the OCR at or below the current level through until the latter part of 2010.”

Following the rate decision, New Zealand’s benchmark NZX 50 index rose by 6.38 points or 0.20% to 3,122.79 shortly after the market opened for the day. Meanwhile, the broader NZX All Capital index added 10.18 points or 0.32% to 3,158.37.

New Zealand’s market edged lower on Wednesday in a quiet trading session. The benchmark NZX-50 index declined 0.2 points or 0.01 percent at 3,116.41. The New Zealand Stock Exchange reported trading volume of 42.5 million shares worth NZ$80.5 million.

Overseas, U.S. stocks rose by moderate margins on Wednesday, as economic optimism generated some buying interest ahead of the weekly employment report. The major averages all closed higher for the fourth straight session, despite wavering after the Beige Book report from the Federal Reserve raised some questions about an imminent economic recovery.

According to the Fed’s Beige Book, a compilation of anecdotal evidence on economic conditions from each of the 12 Federal Reserve districts, economic activity continued to stabilize in July and August. The Fed added that most districts indicated that the outlook for economic activity among their business contacts remained cautiously positive.

However, the report said that consumer spending remained soft in most regions, with a majority of the Fed districts reporting that retail activity was flat. While Boston, Philadelphia, and Kansas City noted some improvement in sales, the increase was primarily attributed to back-to-school purchases.

The comments regarding retail activity contributed to a mid-afternoon pullback by stocks, as consumer spending accounts for about two-thirds of U.S. economic activity. Nonetheless, equities moved back to the upside in late session trading.

This morning’s lack of first tier economic data let traders focus on a slew of corporate news, including a third quarter revenue guidance boost from Altera Corp. (ALTR), encouraging earnings from Casey’s General Stores (CASY) and a mixed comparable sales report from McDonald’s (MCD).

The major U.S. averages all saw some upside in late day trading, but they were unable to return to their best levels of the day. The Dow closed up by 49.88 points or 0.5 percent at 9,547.22, the Nasdaq advanced by 22.62 points or 1.1 percent to 2,060.39 and the S&P 500 rose by 7.98 points or 0.8 percent to finish at 1,033.37.

Crude oil prices rose for a third straight session on the New York Mercantile Exchange on Wednesday, but backed off the highs of the day. Traders awaited results from the OPEC meeting, as well as inventory data. Light sweet crude rose to $71.31 per barrel, up 21 cents on the session. Earlier in the session, oil touched a 12-day high of $72.52.

In the early trading on the New Zealand stock market on Thursday, market leader Telecom advanced 0.74%, as second ranked Contact Energy and Fletcher Building, the third best stock, remained unchanged.

In the retail sector, Hallenstein Glasson remained unchanged, as jewelry retailer Michael Hill International gained 1.27%, Pumpkin Patch added 0.53% and Warehouse collected 0.25%. Among energy stocks, TrustPower remained unchanged, while Vector advanced 0.51%.

Among the dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Telstra and Westpac Bank remained unchanged, as Lion Nathan slipped 0.34% in Thursday’s early trading.

Among other notable stocks, Infratil, Mainfreight, Sky Network Television and Steel & Tube Holdings remained unchanged, as Methven surged 1.27%, Nuplex eased 0.42% and Sky City added 0.94%. Meanwhile, Fisher & Paykel Appliances and Fisher & Paykel Healthcare remained unchanged.

The major gainers in the day’s early trading included- Air New Zealand by 0.80%, AMP NZ Office Trust by 1.22%, Freightways by 0.95%, Goodman Property Trust by 1.04% and Tower by 0.63%.

The early losers on Thursday included- Cavalier by 0.80%, New Zealand Oil & Gas by 0.62%, PGG Wrightson by 1.39%, Sanford by 1.38% and Skellerup Holdings by 1.56%.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

Posted in Categories: Australia, New Zealand, Releases, Stocks, USA.

Subscribe by RSS Subscribe by Email