Zero cases news comes as a boost for markets

The sharemarket and the kiwi dollar appear to have had a small boost from news that New Zealand did not have any new cases of Covid-19 to report yesterday for the first time in seven weeks.

The NZX top-50 index had been down 150 points, or 1.4 per cent, at 10,300 prior to the 1pm announcement.

But the index regained 100 points within two hours of the statement from director-general of health Dr Ashley Bloomfield.

The New Zealand dollar also turned around on the announcement, gaining a modest 0.16 US cents by 3pm, after drifting down to US60.14c in pre-lunch-time trading.

The kiwi also made a similarly-modest gain of 0.16 Euro cents gain against the Euro.

Credit ratings agency Standard and Poor’s subsequently reaffirmed its positive long-term outlook on New Zealand’s ‘‘AA/ A-1+’’ foreign currency and ‘‘AA +/A-1+’’ local-currency sovereign credit ratings.

S&P said Covid-19 had pushed New Zealand’s economy into recession and that ‘‘headwinds’’ and uncertainties remained.

It also forecast property prices would fall by about 10 per cent in the year ahead as unemployment rose and migration slowed because of travel restrictions.

But it said New Zealand’s monetary flexibility, ‘‘wealthy economy’’, and institutions were conducive to ‘‘swift and decisive policy actions and support the ratings positive trajectory’’.

‘‘The positive outlook reflects New Zealand’s strong fundamentals and that its fiscal profile should strengthen after the Covid19 outbreak subsides,’’ it said.