US stimulus sign off sees NZ shares surge

New Zealand's benchmark share index surged as US President Joe Biden signed off a two trillion-dollar stimulus package which boosted global investor sentiment.

Friday, March 12th 2021, 7:13PM

by BusinessDesk

The S&P/NZX 50 Index rose 154.29 points, or 1.3%, to 12,426.77. Within the index, 34 stocks rose, 11 fell, and five were unchanged. Turnover was $199.7 million.

BNZ interest rate strategist Nick Symth said markets traded with a risk-on tone overnight with the S&P 500 rising to a new all-time high and the tech-heavy Nasdaq up more than 2.5%.

“The Nasdaq continues to recover from its recent sell-off, which saw it enter ‘correction territory’ earlier this week, with bond yields showing signs of stabilising,” he said.

New Zealand’s market followed this lead from Wall Street with the index having one of its largest gains so far this year.

Auckland International Airport led the charge, jumping 6.3% to $7.55, with Air New Zealand also achieving a significant gain, up 4.1% at $1.77.

Kiwi Property Group raised its earnings guidance by as much as 14% because its retailing tenants are performing better than it expected.

The company said leasing outcomes and turnover rent have exceeded forecast while rental abatements and doubtful debt allowances are less than anticipated.

Shares in the property investor jumped 4.2% to $1.23 on the market today, it is due to report its annual results on May 24.

Argosy Property climbed 1.4% to $1.48 and Stride Property was up 0.9% at $2.16. However, Goodman Property Trust fell 1.4% to $2.20.

Most stocks on the index were stronger today, but a number fell. Including A2 Milk Company, down 1.2% at $9.44, and Scales Corporation which fell 2.3% to $4.26.

Much of the investment market action happened in New Zealand’s private market, with retail software company Vend and geoscience software firm Seequent both announcing takeovers today.

Vend sold to a Canadian firm for about $480 million, while Seequent raked in almost $1.5 billion.

Nathaniel Keall an economist at ASB Bank said the bullish risk sentiment overnight saw the safe-haven US dollar decline, while risk-sensitive commodity currencies climbed.

The kiwi dollar was trading at 72.14 US cents at 5pm in Wellington, up from 72.03 cents yesterday.

The trade-weighted index was at 75.11 at 5pm, from 75.15 yesterday. The kiwi traded at 92.71 Australian cents from 93.02, traded at 78.44 yen from 78.19 yen, 60.31 euro cents from 60.40 cents, 51.62 British pence from 51.68 pence, and 4.6777 Chinese yuan from 4.6779 yuan.

Tags: Market Close