by BusinessDesk
The S&P/NZX 50 Index rose 109.82 points, 0.9 percent, to 11,902.98. Within the index, 35 stocks rose, six fell and nine were unchanged. Turnover was $205 million.
Investors reversed some of the 2.5 percent loss the index incurred over the past two days after improving manufacturing data in China and the US stoked optimism about the local economy.
FX traders were also more positive about the kiwi dollar relative to the fragile USD, which slid further overnight, propelling the NZD/USD to a 14-month high.
The kiwi was trading at 67.80 US cents at 5pm in Wellington, up from 67.57 cents yesterday.
The currency also spiked against the Australian dollar after data was released showing that country’s gross domestic product dropped 7 percent, putting it officially in recession. Economists had been picking a 6 percent decline.
The kiwi traded at 92.16 Australian cents at 5pm from 91.30 cents, the trade-weighted index was at 72.64, up from 72.17 yesterday, 71.89 yen from 71.46 yen, 56.94 euro cents from 56.35 cents, 60.67 British pence from 50.38 pence, and 4.6303 Chinese yuan from 4.6087 yuan.
Shares on the NZX 50 rallied on some economic optimism despite the strong currency providing a headwind for exporters.
“The bulls remain in control with the Nasdaq and S&P 500 hitting new record highs overnight,” said Greg Smith, head of research at Fat Prophets. “The New Zealand market continues to be a standout in the region, despite all the disruption from the (cyber) attacks.”
Vista Group International led the market higher, gaining 3.9 percent to $1.85, likely following a lead from Wall Street tech stocks which saw strong gains overnight.
Fletcher Building was up 3.8 percent to $3.57 and Restaurant Brands rose 3.4 percent to $12.44, both stocks were likely buoyed by optimism for a stronger domestic economy.
Restaurant Brands settled the acquisition of 58 KFC stores and 11 multibrand KFC and Taco Bell stores in California overnight.
The gains were broad based with only six stocks weaker. Pushpay Holdings posted the biggest decline, falling 4 percent to $8.26. The faith sector donations app operates primarily in the United States and is affected by the weakened currency.
Other stocks sensitive to the exchange rate were mixed. Fisher & Paykel Healthcare rallied 1.8 percent, after two days of declines, A2 Milk held at $18.30 and Synlait Milk fell 1 percent to $6.22.
Outside the top 50 companies, The Warehouse Group announced plans to cut up to 750 jobs as it looks to restructure its operations at more than 60 stores. Its shares fell 1.5 percent to $2.04.
Gentrack Group gained 1.3 percent to $1.58. The company today appointed a new chief executive after a lengthy search. Former Amdocs executive Gary Miles will take the lead from the London office starting in October.
| « Strong currency weighs down exporters | Entertainment stocks lead market rally » |
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