17 Jul 2008

NZ market follows Wall St lead

1:06 pm on 17 July 2008

The New Zealand sharemarket followed Wall Street's lead on Thursday, rising 43 points to 3101 on turnover of $53 million at midday.

At 12.35pm, Telecom was up 4 cents to $3.42, Contact Energy rose 6c to $7.46 and Fletcher Building gained 26c to $6.30.

Sky City Entertainment was up 5c to $3.03, and the Warehouse gained 15c to $4.05. PGG Wrightson was up 2c to $2.42.

Rakon rose 10c to $2.70 after announcing it will form a joint venture with the owners of Chinese based Timemaker Crystal Technology.

The New Zealand dollar was trading at 77.14 US cents, 79.07 Australian, 38.55 pence, 81.01 Yen, and point-4871 euro. The Trade Weighted Index was 68.16.

Stocks in the United States jumped more than 2% on Wednesday after strong results at fifth-biggest bank Wells Fargo fueled a powerful rally in the battered sector and an unexpected leap in US crude supplies led oil prices to fall sharply.

Driving the market rally was a surge in banks, which have suffered a terrible year, as results from Wells Fargo, the fifth-largest bank in the US, eased investor fears about mortgage losses. The sector has absorbed more than $US400 billion of write-downs and credit losses since the global credit crisis began last year.

Wall Street's three major indexes posted their biggest one-day percentage gains since 1 April. The Dow Jones industrial average rose 276.74 points, or 2.52%, to 11,239.28. The Standard & Poor's 500 Index gained 30.43 points, or 2.50%, to 1,245.34. The Nasdaq Composite Index added 69.14 points, or 3.12%, at 2,284.85.

US crude oil futures fell 3% or $US4.14 to settle at $US134.60 a barrel. London Brent crude fell $US2.56 to $US136.19 a barrel.

The Australian stock market opened over 1% higher after the strong US lead.

At 1015 AEST the benchmark S&P/ASX200 index was up 59.6 points, or 1.22%, to 4,930.2 while the broader All Ordinaries gained 53.1 points to 5,000.6.

The September share price index futures contract found 68 points to 4,919, on a volume of 8,442 contracts.