(RTTNews) - The New Zealand share market market opened steeply higher on Friday, taking cues from Wall Street’s major overnight gains. The U.S. markets closed sharply higher overnight after several days of losses, with traders encouraged by data showing 3.5 percent GDP growth, signaling an end to the American recession.

The benchmark NZX 50 index surged 30.41 points or 0.95% to 3,226.03 shortly after the market opened for the day. Meanwhile, the broader NZX All Capital index collected 28.72 points or 0.89% to be at 3,238.55.

New Zealand’s share market declined on Thursday, but by a smaller percentage than others in the Asia/Pacific region. The day’s trading opened an hour after the Reserve Bank of NZ announced that it would leave interest rates on hold at 2.5 percent, and said rates would likely not be raised until the 2nd half of 2010.

The benchmark NZX-50 index fell 7.2 points or 0.2 percent to close at 3,195.6 on Thursday. The NZ Stock Exchange posted trading volume of 60.4 million shares valued at NZ$98.2 million.

Overseas, U.S. stocks rose by substantial margins on Thursday, as the day’s upbeat third quarter GDP report generated risk appetite and drove traders to fund a rally in the stock market. The major averages all finished firmly in positive territory, partly offsetting their recent losses.

The Commerce Department said its advance estimate showed that GDP increased at an annual rate of 3.5 percent in the third quarter compared to a 0.7 percent decrease in the second quarter. Economists had been expecting GDP to increase by 3.2 percent.

The considerable jump in GDP prompted some traders to shrug off the latest news on the labor market, even though today’s jobs report from the Labor Department showed that jobless claims did not fall by as much as economists had expected.

The Labor Department said jobless claims in the week ended October 24th edged down to 530,000 from the previous week’s unrevised figure of 531,000. The drop was smaller than the decrease of about 6,000 expected by economists.

On the earnings front, Procter & Gamble (PG), Exxon Mobil (XOM), AutoNation (AN) and Motorola (MOT) were among the firms reporting on the day, largely topping bottom line forecasts but failing to meet revenue expectations.

In other news, the Federal Reserve concluded its treasury buyback program this morning, purchasing the last batch of $300 billion in bonds. The program began on March 25th as one of the measures to ease the grip of the recession on the U.S. economy.

As one of the components of its economic intervention has wound to a close, economists have begun to speculate as to the next step in the Fed’s exit strategy, including a possible hike in interest rates.

All the major U.S. averages closed sharply higher, just off their best levels of the day. The Dow closed up by 199.89 points or 2.1 percent at 9,962.58, the Nasdaq advanced by 37.94 points or 1.8 percent to 2,097.55 and the S&P 500 rose by 23.48 points or 2.3 percent to 1,066.11.

Crude oil surged on the New York Mercantile Exchange on Thursday, but couldn’t hold above $80 per barrel. Prices were boosted by a better-than-forecast gross domestic product report and some mixed jobs data. Light sweet crude oil for December delivery rose to $79.87 per barrel, up $2.41 on the session. Prices reached as high as $80.46 earlier in the session.

On the currency front, the New Zealand dollar was buying US73.55c by 8am on Friday, compared to US71.74c at 5pm on Thursday. Earlier, the kiwi had touched a three-week low of US71.60c on Thursday afternoon, just hours after the Reserve Bank announced it was leaving the OCR on 2.5 percent at 9 am.

In the economic news for Friday, Statistics NZ reports its data on the number of construction consents for new housing units in the country for the month of September at 21:45 PM GMT.

In the early trading on the New Zealand stock market on Friday, market leader Telecom surged 1.93%, while second ranked Contact Energy collected 0.64% and Fletcher Building, the third best stock, added 0.97%.

In the retail sector, Hallenstein Glasson, jewelry retailer Michael Hill International and Pumpkin Patch remained unchanged, as Warehouse inched up by 0.23%. Among energy stocks, TrustPower remained unchanged, as Vector lost 0.52% in the early trading.

Among the dual listed issues, AMP, APN News & Media and Lion Nathan remained unchanged, as Australia and NZ Banking Corp eased 0.17%, Telstra collected 1.20% and Westpac Bank jumped 2.01% in the early trading on Friday morning.

Among other notable stocks, Infratil, Methven and Steel & Tube Holdings remained unchanged, as Mainfreight collected 1.13%, Nuplex added 1.63%, Sky City advanced 1.18% and Sky Network Television surged 2.11%. Meanwhile, Fisher & Paykel Appliances climbed 1.59% and Fisher & Paykel Healthcare lost 1.61%.

The only losers among the shares listed under the benchmark NZX 50 index in the early trading on Friday were Australia and NZ Banking Corp, Fisher & Paykel Healthcare and Vector.

The major gainers included– AMP NZ Office Trust by 1.20%, Freightways by 2.00%, New Zealand Refining Company by 4.30%, PGG Wrightson by 3.23%, Pike River Coal by 1.83%, Restaurant Brands NZ by 2.74%, and Skellerup Holdings by 3.77%.

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Posted in Categories: Australia, New Zealand, Releases, Stocks, USA.

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