Market commentaries
AUCKLAND: New Zealand shares rose for a third day as the $US2 trillion stimulus package bolsters investor confidence that governments are throwing everything at the Covid19 pandemic.
The S&P/NZX 50 Index increased 368.09 points, or 4%, to 9632.47. Within the index, 43 stocks gained, six fell, and one was unchanged. Turnover was $210 million.
US policymakers are finalising a massive bailout for the world’s biggest economy, providing support to businesses and workers as Covid19 spreads. Governments around the world have rolled out major packages to soften the economic blow as they impose lockdowns to limit the infection.
Greg Smith, head of research at Fat Prophets, said the stimulus package helped ease fears about the economic damage being wrought by the pandemic, but it was far too soon to call a bottom.
‘‘It’s been a couple of good days after a traumatic few weeks,’’ he said.
Mr Smith expected a levelling off in global infection rates will result in volatility in financial markets subsiding. However, the ultimate cost to nations would depend on how long restrictions such as New Zealand’s lockdown stayed in place.
‘‘There’s going to be a huge economic cost, paid by us and future generations,’’ he said.
Stocks that have been beat up in recent months led the market higher.
Mr Smith said the length of the lockdown would have a bearing on tourism operators.
Air New Zealand was again the most traded stock. It rose 2.3% to 89c after saying it will operate a limited international network, but is working with the Government to keep transport lines open. The carrier has also been chartered by the German Government to fly Germans home from Canada.
Mr Smith said a number of merger and acquisition deals had fallen over in recent days as the rapid shift in conditions made buyers rethink their purchases.
Australian shares have rallied for a third straight day after a massive US stimulus deal sent global markets soaring.
The S&P/ASX200 benchmark index was up 50.4 points, or 1.01%, at 50.48.5 at midday AEDT yesterday, after an early surge of more than 2%.
The All Ordinaries index was up 64.2 points, or 1.28%, at 5070.4 points with all sectors higher except consumer staples and financials.
The big supermarkets were lower Coles down 19c at $16.46 and Woolworths dropping 49c to $35.93.
Financial stocks were higher in the morning but the big four banks were all edging south at noon.
Global stocks rocketed overnight after US politicians finally reached a deal — yet to be passed — on a $A3.3 trillion stimulus measure to shore up the world’s biggest economy.
Despite last minute delays it was expected the rescue package will offset the economic impact of the viral outbreak, CMC Markets strategist Michael
McCarthy said.
‘‘The US dollar fell again, and gold edged lower with bonds, as investors and traders contemplated a better growth outlook,’’ he said.
Locally there has been another string of Covid19 job losses and more companies withdrew earnings guidance.
The Aussie dollar was buying US58.96c at noon AEDT yesterday, down fromUS60.33c on Wednesday. — BusinessDesk/AAP