RTTNews - The New Zealand sharemarket opened stronger on Friday, following a positive overnight lead from Wall Street where U.S. stocks closed higher on a series of strong earnings reports and economic data.
The benchmark NZX 50 index was up 27.31 points or 0.91% to 3,021.31 shortly after the market opened for the day, while the broader NZX All Capital index added 22.46 points or 0.74% to 3,070.02.
New Zealand's sharemarket's response to the Reserve Bank's interest rate decision on Thursday was subdued. The market finished generally flat, a day after the RBNZ left interest rates unchanged at a record low of 2.5 percent.
The benchmark NZX-50 index advanced 3.5 points or 0.1 percent to close at 2,994.0 on Thursday. The New Zealand Stock Exchange reported trading volume of 41.9 million shares valued at NZ$97.7 million.
Overseas, U.S. stocks posted strong gains on Thursday, fueled by stabilizing earnings and employment figures, while respectable results for a seven-year note auction also boosted equities. The major averages all finished the day firmly in positive territory despite some late session profit taking, closing at their best levels of the year.
Early buying interest was generated as traders reacted positively to the latest earnings and economic data, including the Labor Department's report on first-time claims for unemployment benefits in the week ended July 25th.
While the Labor Department said jobless claims came in above the average analyst estimate, there were some concerns that claims could have come in substantially higher. Further, the four-week moving average fell for the fifth straight week, dropping to its lowest level since January.
The report said that weekly jobless claims rose to 584,000 from the previous week's revised figure of 559,000. Economists had expected jobless claims to rise to 575,000 from the 554,000 originally reported for the previous week. The report also showed that the less volatile four-week moving average fell to 559,000 from the previous week's revised average of 567,250.
Traders also delved into a slew of earnings reports, with Visa (V) reporting adjusted earnings and revenues that beat estimates. Cigna (CI), Tyco (TYC), Kellogg (K) and Master Card (MA) also surpassed expectations on the bottom line, although revenues largely missed the mark. Meanwhile, energy giant Exxon Mobil (XOM) fell well short of earnings forecasts, although its revenues beat expectations.
U.S. equities saw some modest upside after the results of the Treasury Department's $28.0 billion sale of seven-year notes showed that the auction attracted stronger than expected demand. The sale drew a high-yield of 3.369 percent, while the bid-to-cover ratio came in at 2.63. The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.
The major U.S. averages ceded considerable ground heading into the close, but they were able to hold onto strong gains. The Dow finished up by 83.74 points or 0.9 percent at 9,154.46, the Nasdaq advanced by 16.54 points or 0.8 percent to 1,984.30 and the S&P 500 rose by 11.60 points or 1.2 percent to 986.75.
Crude oil surged higher on the New York Mercantile Exchange on Thursday as traders bet a recent plunge was overdone. The one-day gain was the largest since April. Light sweet crude for September delivery rallied to $66.92 per barrel, up $3.57 on the session. Prices touched as high as $67.29, approaching the week's high crossing of $68.99.
On the currency front, the New Zealand dollar was buying US65.20c by 8 am on Friday after recovering from a low of around US64.75c touched late Thursday morning. The kiwi was trading in a range between US65.15c and US65.40c during the night.
In the early trading on the New Zealand stock market on Friday, market leader Telecom gained 0.70%, as second ranked Contact Energy added 1.43% and Fletcher Building, the third best stock, surged 2.42%.
In the retail sector, Hallenstein Glasson jumped 4.62%, jewelry retailer Michael Hill International remained added 1.52%, Pumpkin Patch collected 3.90% and Warehouse gained 1.28%. Among energy stocks, TrustPower advanced 1.28%, as Vector remained unchanged.
Among the dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged on Friday morning.
Among other notable stocks Infratil advanced 0.56%, Mainfreight added 1.14%, Nuplex gained 2.16%, Sky City jumped 1.83%, Sky Network Television surged 2.30% and Steel & Tube Holdings climbed1.64%. While Fisher & Paykel Appliances gained 2.33%, Fisher & Paykel Healthcare collected 1.55%.
The losers among stocks listed under the NZX 50 index morning were few on Friday and included-- Ebos Group Limited by 0.19%, Methven Limited by 0.71% and New Zealand Refining Company by 1.38%.
The major gainers in the day's early trading included-- Auckland International Airport by 1.76%, Air New Zealand by 1.83%, AMP NZ Office Trust by 1.33%, Freightways by 1.61%, Goodman Property Trust by 1.02%, Guinness Peat Group by 1.40%, New Zealand Oil & Gas by 2.53%, Pike River Coal by 0.88%, Ryman Healthcare by 6.51% and Tourism Holdings by 2.04%.
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