Market commentary

WELLINGTON: New Zealand shares finished an already strong week with an extra surge as investors anticipated the end of strict lockdowns locally and in the US. Tourism Holdings and SkyCity Entertainment Group notched up doubledigit gains.

The S&P/NZX 50 Index rose 305.53 points, or 2.9%, to 10,778.72. Within the index, 41 stocks increased, six fell and three were unchanged. Turnover was $354.4 million.

The local benchmark is up more than 8% from the close before Easter weekend as the number of new virus cases continues to fall.

Greg Smith, head of research at Fat Prophets, said the positive end to an already strong week was a sign of investor optimism.

Sharemarkets across Asia gained after US President Donald Trump indicated he would begin reopening the US economy with a staged exit from lockdown. In New Zealand, investors continued to expect restrictions to ease after just eight new confirmed and probable cases of Covid19 were reported yesterday.

That optimism was bolstered by reports that a Covid19 treatment being tested by Gilead had shown promising results. The American biotechnology company’s stock price jumped 16% on the news and provided further excitement for investors looking toward the end of the outbreak crisis.

Shane Solly, a portfolio manager at Harbour Asset Management, said that although the report had not been confirmed, it was giving investors a reason to buy.

‘‘There is a lot to be positive about with New Zealand looking to move out of lockdown and perhaps be a country with a relatively low impact from the virus outbreak,’’ Mr Solly said.

Local companies that were caught in the eye of the storm have recovered strongly this week, he said.

Tourism Holdings led the market higher, increasing 13.7% to $1.41 on the improving virus outlook. However, Mr Smith warned investors may be getting ahead of themselves as the future of tourism remained uncertain.

SkyCity rose 10.5% to $2.53. Mr Smith said moving to level 3 did not mean consumers would be flocking back to the casino, although he noted the stock had been heavily sold throughout the downturn.

Vista Group International advanced 6.4% to $1.49, well above the $1.05 price investors are paying in its $65 million capital raising. Mr Solly said the cinema software company had found strong support after raising money and was now in a strong position. — BusinessDesk