RTTNews - The New Zealand share market opened moderately higher on Friday, following on a positive lead from the Wall Street where the major U.S. averages closed higher on encouraging economic data and an above average demand for the auction of $11 billion worth of 30-year U.S. Treasury bonds.
The benchmark NZX 50 index was up 6.56 points or 0.23% to 2,803.10 shortly after the market opened for the day, while the broader NZX All Capital Index added 6.79 points or 0.24% to 2,855.69.
The New Zealand market ended modestly lower on Thursday after the central bank left its official cash rate unchanged at 2.5% but left the door open to lower rates. The benchmark NZX-50 index ended at 2,797, down 31 points or 1.11%.
Overseas, U.S. stocks were boosted higher on Thursday by trader reaction to the results of the thirty-year bond auction, following a strong start on the heels of encouraging economic data. The major averages ended the day well off their highs, however, giving back some ground in late day trading.
Stocks showed a notable upward move in afternoon trading as traders digested the results of the Treasury Department's auction of $11.0 billion worth of thirty-year bonds. The sale drew a high-yield of 4.72 percent, its highest level since August of 2007 but below estimates of 4.80 percent.
The auction also attracted strong demand, with the bid-to-cover ratio coming in at 2.68. The sale of government-backed debt enjoyed strong interest from foreign financial entities seeking to bolster their positions in guaranteed returns.
On the economic front, a Commerce Department report showed that retail sales rose 0.5 percent in May following a revised 0.2 percent decrease in April. Economists had expected sales to increase by 0.5 percent compared to the 0.4 percent decrease originally reported for the previous month.
Separately, the U.S. Labor Department revealed that initial jobless claims, a closely watched gauge of layoffs, came in at 601,000 for the week ended at June 6th. This was down 24,000 from the previous week's revised level of 625,000.
The major U.S. averages ended the session moderately higher, although well off their best levels of the day. The Dow closed up 31.90 points or 0.4 percent at 8,770.92, the Nasdaq closed up 9.29 points or 0.5 percent at 1,862.37 and the S&P 500 closed up 5.74 points or 0.6 percent at 944.89.
Crude oil added to its best close since October as the International Energy Agency raised its demand expectations for the year. On Thursday morning, the IEA announced it raised its 2009 demand estimate to 83.3 million barrels per day, up 120,000 barrels from last month's forecast.
Light sweet crude oil for July delivery settled at $72.68 per barrel, up $1.35 for the day, extending its highest close since October. Earlier in the day, oil reached as high as $73.23.
On the currency front, the New Zealand dollar was buying US64.33c by 8am on Friday, compared to US63.72c at 5pm on Thursday. The kiwi had peaked above US64.65c during the night.
In the economic news for Friday, Statistics New Zealand releases its reports on Retail Sales and Retail Sales Ex-Auto for the month of April, along with its data on food prices, at 22:45 PM GMT.
In the early trading on the New Zealand stock market on Friday, market leader Telecom gained 0.39%, as second ranked Contact Energy added 0.18% and Fletcher Building, the third best stock, remained unchanged..
In the retail sector, Hallenstein Glasson surged 2.04% and Pumpkin Patch added 1.52%, as jewelry retailer Michael Hill International and Warehouse remained unchanged.
In the energy sector, Vector and TrustPower remained unchanged in the early trading on Friday.
Among the dual listed issues, AMP fell 1.56 and Australia and NZ Banking Corp eased 0.14%, as APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged in the day's early trading.
Among other notable stocks, Infratil, Mainfreight, Methven, Nuplex and Steel & Tube Holdings remained unchanged, as Sky Network Television collected 1.17% and Sky City added 0.72%. Fisher & Paykel Appliances and Fisher & Paykel Healthcare also remained unchanged.
Other gainers in the day's early trading included- Auckland International Airport by 0.64%, AMP NZ Office Trust by 1.37%, New Zealand Oil & Gas Limited by 0.62%, PGG Wrightson by 1.43% and Rakon by 7.14%.
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