Wellington - The New Zealand stock market bounced back by 1.6 per cent Friday in the wake of the recovery on Wall Street as investors snapped up bargains after share prices fell by 5 per cent the previous day.

But it was a nervous recovery, with the benchmark NZX 50 index losing ground in the afternoon after gaining more than 2 per cent in morning trading.

It ended the day 44 points up, or 1.59 per cent, on 2808.76.

Telecom New Zealand, the biggest company on the board, accounted for nearly half the day's turnover as buyers moved in following Thursday's 8.6 per cent fall in price to its lowest level in more than 16 years.

It rose 5 per cent during Friday to 2.34 New Zealand dollars (1.43 US dollars). (dpa)