RTTNews - The New Zealand stock market opened steeply higher on Tuesday, riding on a strong positive overnight lead from Wall Street where U.S. stocks closed sharply higher on improved manufacturing, housing and banking data.
The benchmark NZX 50 index was up 30.55 points or 1.00% to 3,078.40 shortly after the market opened for the day, while the broader NZX All Capital index added 23.36 points or 0.75% to 3,121.91.
New Zealand's market moved modestly higher in a lightly traded session on Monday. The benchmark NZX-50 index advanced 31.6 points or 1.05 percent to 3,047.9. The New Zealand Exchange posted trading volume of 36.1 million shares valued at NZ$78.5 million. Advancing issues outnumbered decliners 60 to 27 with 37 unchanged.
Overseas, U.S. stocks saw a significant rally on the first trading day of August, fueled by better-than-expected economic data. The major averages all finished in positive territory, with the Nasdaq and the S&P 500 moving past the key technical levels of 2,000 and 1,000, respectively.
Notable buying interest was generated by a report from the Institute for Supply Management that showed a much slower than expected pace of contraction in manufacturing activity in July. The report also showed notable improvements in new orders and production.
The ISM said its index of activity in the manufacturing sector rose to 48.9 in July from 44.8 in June, although a reading below 50 indicates a contraction. Economists had been expecting a more modest increase to a reading of 46.5.
Separately, the U.S. Commerce Department revealed that construction spending rose 0.3 percent in June following a revised 0.8 percent slide in May. The figure surprised economists, who had expected a decline of 0.5 percent for the month.
The unexpected increase was largely due to a 1.0 percent increase in public construction. While private construction slipped 0.1 percent, residential construction spending was up 0.5 percent.
Some positive sentiment was also generated by news that Ford (F) reported its first increase in U.S. sales in nearly two years in the month of July. Ford said its sales rose 2.3 percent compared to the same month a year ago due in part to the government's Cash for Clunkers program.
In earnings news today, Humana (HUM) and Tyson Foods (TSN) beat Wall Street estimates, while traders are looking forward to the release of results from home-building stalwarts Centex (CTX) and Pulte Homes (PHM) after the closing bell this afternoon.
The major U.S. averages all closed sharply higher, with the Nasdaq ending the session at its best level of the day. The Dow closed up by 114.95 points or 1.3 percent at 9,286.56, the Nasdaq climbed by 30.11 points or 1.5 percent to 2,008.61, and the S&P 500 rose by 15.15 points or 1.5 percent to 1,002.63.
With the gains, the Nasdaq closed above the 2,000 level for the first time since October, while the S&P 500 closed above the 1,000 level for the first time since November. The Dow also set a nine-month closing high.
Crude oil continued its upward surge on Monday on the New York Mercantile Exchange, extending a seven-week high. Encouraging economic data improved the prospect of energy demand. Light sweet crude for September delivery rallied to $71.58, up $2.13 on the session. Prices reached as high as $72.10 earlier in the day.
On the currency front, the New Zealand dollar was buying US66.73c by 8 am on Tuesday, when compared to US66.30c at 5 pm on Monday. The kiwi had touched US66.87c during the night.
In the economic news for Tuesday, Statistics NZ is to release its data on private wages and average hourly earnings for the second quarter at 22:45 PM GMT Tuesday. Also, Australia and New Zealand Banking Group Ltd is due to release its commodity price report for July at 03.00 AM GMT Wednesday.
In the early trading on the New Zealand stock market on Friday, market leader Telecom gained 1.41%, as second ranked Contact Energy added 1.74% and Fletcher Building, the third best stock, collected 1.76%.
In the retail sector, Hallenstein Glasson and jewelry retailer Michael Hill International remained unchanged, as Pumpkin Patch surged 4.27% and Warehouse gained 1.02%. Among energy stocks, TrustPower advanced 0.64%, 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 Tuesday morning.
Among other notable stocks Infratil advanced 1.11%, Mainfreight added 2.15%, Methven gained 0.71%, Nuplex surged 2.06%, Sky City climbed % 1.19%, Sky Network Television collected 1.36% and Steel & Tube Holdings jumped 1.59%. While Fisher & Paykel Appliances added 1.14%, Fisher & Paykel Healthcare collected 1.82%.
There were only three losers among the stocks listed under the NZX 50 index on Tuesday morning and included-- Guinness Peat Group by 4.91%, Property For Industry Limited by 0.85% and Skellerup Holdings Limited by 1.79%.
The major gainers in the day's early trading included-- Auckland International Airport by 1.17%, Air New Zealand by 1.80%, AMP NZ Office Trust by 1.32%, Freightways by 2.22%, ING Property Trust by 1.41%, Kiwi Income Property Trust by 1.02%, Rakon by 1.44%, Ryman Healthcare by 2.30%, Tourism Holdings by 15.38% and Tower by 2.27%.
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