The sharemarket liked what it heard from Reserve Bank governor Alan Bollard this morning.
Stocks leapt in early trading, following the earlier announcement on official interest rates.
The Reserve Bank today lowered New Zealand's official cash rate 50 basis points to 2.5 per cent.
And in an unusually explicit piece
of guidance, governor Bollard said the rate was expected to remain at or below the current level through until the latter part of 2010.
The decision saw the NZ dollar plunge about 1c against the greenback, while the NZ sharemarket would also have received a boost from a strong performance on Wall Street overnight.
Around 10.15am the benchmark NZX-50 index was up 36.9 points, or 1.4 per cent, to 2736.61, having touched a 10-week high a few minutes earlier. The market has risen every day this week so far, gaining 13.3 points yesterday.
Leading shares showed strong gains with Telecom gaining 6c to $2.78, Fletcher Building up 15c to $6.53 and Contact Energy lifting 12c to $5.90.
Other early risers included Freightways up 7c to $2.87, Fisher & Paykel Healthcare up 6c to $3.11, Mainfreight up 6c to $4.43, NZX up 4c to $6.94 and Sky City up 4c to $2.81.
The Warehouse lifted 3c to $3.53, while stocks gaining 2c early included Auckland Airport to $1.67, Infratil to $1.57, Nuplex to 35c, Restaurant Brands to 96c, and Tower to $1.32.
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In the United States, stocks climbed after grim growth data offered hints of future expansion, a prospect reinforced by the Federal Reserve's hopeful comments.
Gross US domestic product dropped at a 6.1 per cent annual rate in the first quarter, but the data showed consumer spending rose and a decline in inventories suggested manufacturers and retailers will have to stock up on merchandise.
The Dow Jones industrial average rose 2.1 per cent to 8185.73, the Standard & Poor's 500 Index gained 2.2 per cent to 873.64, and the Nasdaq Composite Index climbed 2.3 per cent to 1711.94.
- NZPA
