RTTNews - The New Zealand stock exchange opened sharply higher on Wednesday, following a strong performance overnight on Wall Street, where positive earnings reports helped U.S. shares close higher after Monday's steep losses.
The benchmark NZX 50 index was up 24.25 points or 0.79% to 3,095.83 shortly after the market opened for the day, while the broader NZX All Capital index added 25.63 points or 0.82% to 3,135.41.
New Zealand's market closed lower on Tuesday. The benchmark NZX-50 index declined 14.5 points or 0.47 percent to 3,071.6. The NZ Stock Exchange reported trading volume of 43.8 million shares valued at NZ$108.7 million.
Overseas, U.S. stocks saw notable strength on Tuesday, partly offsetting the steep losses posted in the previous session amid some encouraging earnings reports. The major averages all finished in positive territory by solid margins, but they remain well off their recent highs.
Buying interest was boosted early on by a set of positive earning reports, with Home Depot (HD), Saks (SKS) and Target (TGT) all exceeding Wall Street estimates on the bottom line, although their revenues fell short of estimates.
Optimism won out despite the release of a report from the Commerce Department showing an unexpected decrease in housing starts in the month of July. The report said that housing starts fell 1.0 percent to an annual rate of 581,000 in July from the revised June estimate of 587,000. Economists had expected starts to rise to 598,000 from the 582,000 originally reported for the previous month.
Separately, the Labor Department revealed that producer prices dropped 0.9 percent in July following a 1.8 percent increase in the previous month. Economists had expected the measure to slip 0.3 percent for the month. Core prices, which exclude the volatile food and energy sectors, ticked down 0.1 percent in July. Economists were looking for core prices to edge up by 0.1 percent.
While the major U.S. averages pulled back off their highs for the session going into the close, they remained firmly in positive territory. The Dow closed up by 82.07 points or 0.9 percent at 9,217.41, the Nasdaq advanced by 25.08 points or 1.3 percent to 1,955.92 and the S&P 500 rose by 9.94 points or 1 percent to 989.67.
Crude oil moved higher amid choppy trading on Tuesday morning, recovering some of yesterday's sharp decline. Recovering global equities helped improve the prospects for energy demand. Light sweet crude for September delivery rose to $69.19, up $2.44 on the session. Prices hit as high as $69.58 after earlier hitting as low as $66.11.
On the currency front, the New Zealand dollar was buying US67.47c by about 8 am on Wednesday, when compared to US66.96c at 5pm on Tuesday.
In the economic news for Wednesday, Statistics New Zealand releases its data on New Zealand's input and output producer prices for the second quarter at 22:45 PM GMT..
In the early trading on the New Zealand stock market on Wednesday, market leader Telecom gained 1.86%, as second ranked Contact Energy added 0.32% and Fletcher Building, the third best stock, surged 2.53%.
In the retail sector, Hallenstein Glasson and jewelry retailer Michael Hill International remained unchanged, as Pumpkin Patch advanced 2.78% and Warehouse collected 0.99%. Among energy stocks, TrustPower eased 0.65%, as Vector added 0.99%.
Among the dual listed issues, AMP, Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged on Wednesday morning.
Among other notable stocks, Infratil advanced 0.56%, Methven added 1.39%, Nuplex jumped 5.12%, Sky City collected 0.30%, Sky Network Television gained 0.87%, while Mainfreight plunged and Steel & Tube Holdings remained unchanged. While Fisher & Paykel Appliances surged 2.53%, Fisher & Paykel Healthcare added 0.92%.
Apart from Trustpower shares, the losers among the stocks listed under the benchmark NZX 50 index were few on Wednesday morning, and included--Goodman Property Trust by 2.91%, New Zealand Refining Company by 9.23% and Sanford Limited by 1.35%.
While the fall in NZ Refining Company shares was due to yesterday's announcement that it would not be paying an interim dividend and that it expects to make a loss in the second half of the year, the Goodman Property Trust fell after the company announced that it was reducing its interest in the trust from 28 percent to 17 percent.
The major gainers in the day's early trading included-- Auckland International Airport by 0.59%, Freightways by 1.61%, Kiwi Income Property Trust by 0.98%, New Zealand Oil and Gas by 0.62%, Property For Industry by 0.92%, PGG Wrightson by 1.12%, Pike River Coal by 1.74% and Rakon by 0.72%.
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