RTTNews - The New Zealand share market opened sharply higher on Wednesday, following a strong overnight lead from Wall Street where U.S. stocks moved sharply higher after data showed an increase in consumer sentiment to its highest level since September.
The benchmark NZX 50 index was up 27.24 points or 1.00% to 2,761.31 shortly after the market opened for the day, while the broader NZX All Capital Index added 26.97 points or 0.96% to 2,831.49.
New Zealand's share market moved modestly lower on Tuesday. The benchmark NZX-50 index declined 6.12 points or 0.22 percent to close at 2,734.08. The New Zealand Stock Exchange reported trading volume of 56.3 million shares carrying a cumulative value of NZ$91.4 million. Declining issues outpaced advancers 48 to 27 with 42 closing unchanged.
Overseas, U.S. stocks snapped a four-day losing streak and staged a substantial rally over the course of the trading day on Tuesday after seeing some initial weakness. The major averages finished near their best levels of the day, bolstered by some positive news on the health of the U.S. consumer.
The major U.S. averages showed a strong upward move over the course of morning trading but moved roughly sideways throughout the afternoon. Nonetheless, the Dow remained firmly positive, eventually ending the session up nearly 200 points.
The Conference Board's reading on consumer confidence for May improved by far more than expected, reaching its highest level since September. The data generated some optimism about the outlook for consumer spending, which accounts for nearly two-thirds of economic activity.
The report showed that the consumer confidence index rose to 54.9 in May from an upwardly revised reading of 40.8 in April. Economists had expected the index to edge up to 42.6 from the 39.2 originally reported for the previous month.
Earlier in the day, disappointing housing price data contributed to the initial weakness. Traders largely shrugged off the data, however, citing the lagging nature of the numbers and choosing to focus on the encouraging consumer confidence data.
The data showed that the S&P/Case-Shiller U.S. National Home Price Index fell 19.1 percent in the first quarter compared to the same quarter a year ago. The decrease marked the steepest decline in the series' 21-year history.
In other news, President Barack Obama officially named Judge Sonia Sotomayor as his nominee for Supreme Court Justice late this morning. If confirmed, Sotomayor would become only the third woman to serve on the court and the first Hispanic.
The major U.S. averages moved roughly sideways in the second half of the day, holding onto strong gains. The Dow closed up 196.17 points or 2.4 percent at 8,473.49, the Nasdaq rose 58.42 points or 3.5 percent to 1,750.43 and the S&P 500 closed up 23.33 points or 2.6 percent at 910.33.
Crude oil turned into positive territory on the New York Mercantile Exchange on Tuesday amid higher hopes for energy demand following the consumer confidence report. The rise added to sharp gains from last week.
Light sweet crude oil for July delivery climbed to $62.37, up 70 cents on the session. Oil touched as high as $62.50 in intra-day trading.
A Conference Board report showed that the consumer confidence index rose to 54.9 in May from an upwardly revised 40.8 in April. Economists had expected the index to edge up to 42.6.
On the currency front, the New Zealand dollar was buying US62.60c by 8am on Wednesday, higher than the US61.79c level at 5pm on Tuesday. The kiwi had briefly dropped to under US61c during the night.
In the economic news for Wednesday, National Bank of New Zealand releases its monthly report on New Zealand's business confidence for the month of May at 03.00AM GMT.
In the early trading on the New Zealand stock market on Wednesday, market leader Telecom added 1.16%, as second ranked Contact Energy climbed 1.40%, and Fletcher Building, the third best stock, advanced 1.90%.
In the retail sector, Hallenstein Glasson, jewelry retailer Michael Hill International, Pumpkin Patch and Warehouse remained unchanged.
In the energy sector, Vector and TrustPower remained unchanged in the early trading on Wednesday.
Among the dual listed issues, AMP dropped 2.97%, as Australia and NZ Banking Corp, APN News & Media, Lion Nathan, Telstra and Westpac Bank remained unchanged.
Among other notable stocks, Infratil collected 1.23%, Mainfreight fell 0.82%, Methven added 2.33%, Nuplex surged 4.55%, Sky City advanced 0.71%, Sky Network Television gained 0.49% and Steel & Tube Holdings jumped 1.05%.
Fisher & Paykel Appliances collected 45.45% after the company announced that Chinese appliance company Haier has agreed to buy a 20 percent stake. Meanwhile, Fisher & Paykel Healthcare collected 1.39%.
Other gainers in the day's early trading included- Auckland International Airport by 1.24%, Ebos by 1.02%, New Zealand Oil & Gas by 0.68%, New Zealand Refining Company by 0.58%, Port of Tauranga by 3.33% and Tourism Holdings Limited by 4.17%.
The losers on Wednesday morning included- Goodman Fielder by 1.34%, Guinness Peat Group by 1.30%, Kiwi Income Property Trust 1.06% and Property For Industry by 1.75%.
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