The New Zealand share market opened sharply higher on Tuesday, following a day of major gains on Wall Street where the major U.S. averages closed significantly higher overnight after the U.S. administration released the details of its latest plan to solve the massive, debilitating banking crisis.
The benchmark NZX 50 index was up 82.42 points or 3.18% to 2,673.85 shortly after the market opened for the day, while the broader NZX All Capital Index added 52.39 points or 1.99% to 2,680.97
New Zealand's share market edged lower in a lack luster day of trading on Monday. The benchmark NZX-50 index closed down 7.6 points or 0.29 percent at 2,591.43. Trading volume was listed by the NZ Stock Exchange at 44.8 million shares valued at NZ$75.1 million.
Overseas, U.S. stocks surged Monday after the Obama administration announced its plans to buy up the toxic assets of the nation's major banks, guaranteeing the loans with a combination of public and private sector funds.
The plan unveiled by Treasury Secretary Timothy Geithner will set up an investment fund to buy mortgage-related securities and other assets that are hurting the balance sheets of banks. The new Public Private Investment Program would combine taxpayer money with private funds, aiming to buy loans and free up banks to renew lending.
The upward move of the market was also assisted by a report released by the National Association of Realtors, which showed that existing home sales rose 5.1 percent to a seasonally adjusted annual rate of 4.72 million units in February from a pace of 4.49 million units in January. Economists had expected sales to slip to a 4.45 million unit rate.
The major U.S. averages accelerated to the upside going into the close on Monday, ending the session at or near their best levels of the day. The Dow closed up 497.48 points or 6.8 percent at 7,775.86, the Nasdaq closed up 98.50 points or 6.8 percent at 1,555.77 and the S&P 500 closed up 54.38 points or 7.1 percent at 822.92.
Crude oil prices surged higher on the New York Mercantile Exchange on Monday as the Obama administration's latest plan to help struggling banks boosted the markets and improved the prospects for energy demand.
Light sweet crude for May delivery rallied to end at $53.80, up $1.73 for the session. Prices hit as high as $54.05 earlier in the day, the best level since January.
On the currency front, New Zealand dollar rose above US57c for the first time in 10 weeks after the U.S. administration outlined the details of its bank rescue plan. The kiwi was buying US57.12c by 8am on Tuesday, compared to US56.52c at 5pm on Monday.
In the early trading on the New Zealand stock market on Tuesday, market leader Telecom surged 3.45%, as second ranked Contact Energy jumped 4.24% and Fletcher Building, the third best stock, climbed 6.39%.
In the retail sector Hallenstein Glasson added 1.77%, as jewelry retailer Michael Hill International remained unchanged. Pumpkin Patch collected 0.96%, as Warehouse added 1.98%.
In the energy sector Vector gained 1.35%, as TrustPower inched by 0.28% in the early trading on Tuesday.
Among the dual listed issues, AMP jumped 7.61%, as Australia and NZ Banking Corp added 3.32% and Westpac Bank advanced 4.35%. APN News & Media, Lion Nathan and Telstra remained unchanged.
Among other notable stocks, Infratil gained 4.73%, Nuplex surged 13.21%, Sky City collected 2.89 and Steel & Tube Holdings added 1.53%. Methven, Mainfreight and Sky Network Television remained unchanged. Fisher & Paykel Healthcare was up 0.65%, as Fisher & Paykel Appliances jumped 8.11%.
There was only one loser among the shares listed under the NZX 50 index on Tuesday morning. Sanford shares were down by 0.70% in the day's early trading.
The major gainers in the day's early trading were- Auckland International Airport by 3.53%, Cavalier by 3.23%, Freightways by 2.51%, Guinness Peat Group by 5.48%, ING Property Trust by 3.45%, New Zealand Oil & Gas Limited by 1.43%, PGG Wrightson by 5.00%, Port of Tauranga by 3.30%, Pike River Coal by 3.95%, Rakon by 5.79%, and Skellerup Holdings by 5.88%.
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