RTTNews - The the New Zealand share market opened higher on Thursday, following the sharp gains made overnight on the Wall Street where U.S. stocks closed higher on better-than-expected earnings reports and some encouraging economic news.
The benchmark NZX 50 index was up 24.07 points or 0.87% to 2,788.15 shortly after the market opened for the day, while the broader NZX All Capital index added 23.49 points or 0.83% to 2,855.85.
New Zealand's market posted a modest gain on Wednesday. The benchmark NZX-50 index advanced 15.58 points or 0.6 percent to 2,764.1. Turnover was reported by the NZ Stock Exchange at x million shares valued at NZ$ million. Advancing stocks outnumbered decliners 43 to 20, with 48 unchanged.
Overseas, U.S. stocks continued to move higher throughout much of Wednesday's trading session after a strong start, largely fueled by trader reaction to the day's earnings data. The major averages all posted substantial gains on the day, extending their gains for the third straight session.
Early strength came amid reaction to a slew of earnings reports, spearheaded by Intel (INTC), which beat analysts' second quarter earnings estimates. While Yum! Brands (YUM) also beat expectations, Abbott Labs (ABT) and Altera (ALTR) reported earnings that came in line with estimates.
Stocks were further bolstered in the afternoon following the Federal Reserve's announcement that it expects a less severe economic contraction in 2009 and a moderately stronger recovery in 2010.
The minutes of the June meeting of the Federal Open Market Committee showed that the GDP estimates were revised to show a smaller than expected decrease in 2009 and a bigger than expected increase in 2010.
The day's influx of economic figures was kicked off this morning by a Labor Department report showing that consumer prices saw a 0.7 percent increase in June compared to the previous month. Economists had projected an advance of about 0.6 percent.
In a separate report, the New York Fed said that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
A separate report from the Federal Reserve indicated a continued decrease in industrial production in the month of June, although the rate of decline slowed by more than economists had been anticipating. With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The major U.S. averages saw further upside in late day trading, finishing near their best levels of the day. The Dow closed up by 256.72 points or 3.1 percent at 8,616.21, the Nasdaq climbed 63.17 points or 3.5 percent to 1,862.90, and the S&P 500 rose 26.84 points or 3 percent to 932.68.
Crude oil rose above $61 per barrel on the New York Mercantile Exchange on Wednesday, boosted by a larger-than-expected decline in crude oil inventories last week. Violence in Nigeria and a weaker dollar also lifted prices.
Light sweet crude for August delivery posted its best close in a week at $61.54 per barrel, up $2.02 for the day. Oil briefly touched as high as $62.
On the currency front, the New Zealand dollar was buying US64.96c at about 8am on Thursday, compared to US64.07c at 5pm on Wednesday.
In the early trading on the New Zealand stock market on Thursday, market leader Telecom gained 1.52%, as second ranked Contact Energy collected 0.34% and Fletcher Building, the third best stock, surged 1.65%.
In the retail sector, Hallenstein Glasson remained unchanged, as jewelry retailer Michael Hill International advanced 1.59%, Pumpkin Patch collected 0.66% and Warehouse added 0.27%. Among energy stocks, Vector gained 1.00%, as TrustPower slipped by 0.67%.
Among the dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged on Thursday morning.
Among other notable stocks, Steel & Tube Holdings and Sky Network Television remained unchanged, as Infratil gained 0.57%, Methven added 1.50%, Nuplex surged 3.16% and Sky City collected 1.12%. Fisher & Paykel Appliances climbed 1.49%, as Fisher & Paykel Healthcare remained unchanged.
Apart from TrustPower, the losers in the day's early trading were few and included-- Goodman Property Trust by 1.09%, Guinness Peat Group by 5.05%, Mainfreight by 0.49% and Property For Industry Limited by 1.67%.
The gainers included-- Auckland International Airport by 1.99%, Air New Zealand by 4.55%, Freightways by 1.06%, Kiwi Income Property Trust by 1.09%, New Zealand Refining Company by 0.15%, Pike River Coal by 0.87% and Tower by 1.18%.
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