NZ shares rise with Aussie market
New Zealand shares tracked their Australian counterparts higher as the ASX rallied on a billion-dollar apprenticeship wage subsidy and the news US president Donald Trump was reportedly recovering quickly from a covid-19 infection.
Monday, October 5th 2020, 6:15PM
by BusinessDesk
The S&P/NZX 50 Index rose 75.42 points, or 0.6 percent, to 11,898.26. Within the index, 26 stocks rose, 16 fell and eight were unchanged. Turnover was $108 million.
The Australian federal government announced on Sunday it would pay out a further A$1.2 billion to subsidise the wages of apprentices. The new money means a total of A$5 billion has been allocated to skills training since the outbreak.
The new fiscal stimulus buoyed investor sentiment together with the news President Trump, who was taken to a military hospital on Friday after testing positive for covid-19, could be discharged as early as tomorrow.
“The ASX is bouncing back on the more positive headlines out of the US — bank stocks are trading higher today although they had a weak period last week,” said Chris Smith, general manager of CMC Markets NZ.
Westpac Banking Corp led the local market higher, rising 3.3 percent to $18.64, while Australia & New Zealand Banking Group rose 3.2 percent to $19.15. Both were traded on very light volumes on the NZX and mirrored a rise on the Australian market.
Fletcher Building was one of the most traded stocks locally, rising 2.5 percent to $4.15 on a volume of 2.1 million shares.
“Labour and National both announcing housing policies can only be good for our biggest home builder in the market,” Smith said.
The company also has operations in Australia and will benefit from the apprenticeship subsidy.
The index’s two biggest companies gained. Fisher & Paykel Healthcare was up 2.3 percent at $33.90 and A2 Milk Co rose 1.6 percent to $15.44 after weighing down the market with steady declines amounting to 17.6 percent last week.
Fonterra Shareholders' Fund units were unchanged at $4 after Fonterra said it would sell most of its China farms for $555 million and use the proceeds to repay debt.
Air New Zealand rose 1 percent to $1.505 as it extended its Friday rally after the Australian government announced New Zealanders would be permitted to enter the country. The stock gained 13.3 percent across last week.
SkyCity Entertainment Group rose 1 percent to $3.05 as its Auckland casino would be able to return to operating at full capacity on Thursday following the NZ government’s decision to move the city to alert level 1 from Wednesday night.
The kiwi dollar increased to 66.37 US cents to 66.50 cents immediately before Prime Minister Jacinda Ardern announced the covid restrictions would be lifted.
The kiwi was trading 66.42 cents at 5pm in Wellington, up from 66.36 cents on Friday.
The trade-weighted index was at 71.60 at 5pm, from 71.62 on Friday. The kiwi traded at 92.52 Australian cents from 92.68 cents, 70.09 yen from 70.10 yen, 56.62 euro cents from 56.64 cents, 51.33 British pence from 51.58 pence, and 4.5098 Chinese yuan from 4.5057 yuan.
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