The New Zealand benchmark NZSX-50 sharemarket index has broken through 3000, albeit briefly, establishing a record and ending weeks of anticipation in the marketplace.
Underpinned by a 1 per cent gain for market leader Telecom, the index moved up to 3000.21 just before the close of trade yesterday, but then
settled back to end the day at 2998.87.
It has been supported by a buoyant economy, strong corporate performances and a plentiful supply of investors' cash. A steady flow of investments from the New Zealand Superannuation Fund has also helped.
Breaching 3000 will not make any difference to sharemarket prices. Rather, it is regarded as a psychologically important figure, boosting confidence for some and increasing trepidation for others.
And despite lining up the zeroes, the market's value is still short of the heights it attained in the 1980s.
The sharemarket was then measured by the Barclays Index. It began at 100 points in 1957 and ran up to about 4000 just before the October 1987 stockmarket crash amid a wave speculative investing.
The indices have since changed several times, making a direct comparison difficult. But the Barclays replacement, the NZSX-40, now stands at about 2575.
NZX replaced the NZSX-40 last year with the NZSX-50 gross, which reflects dividend payments.
It was calculated to start at the NZSX-40's equivalent level of 1880 points.
NZX head Mark Weldon said that watching yesterday's rise was not quite the same as the New York Exchange watching the Dow Jones break 10,000 points, but overseas callers he had spoken to yesterday were aware of the pending milestone.
"It's good that people are excited about it," he said.
"It's good to have milestones and it's good that people who have invested in the market have made a lot of money on its way up to 3000."
Weldon said the level reflected some outstanding performances from New Zealand companies.
The collapse of discount broker Access was a major blip but quick action by NZX meant no investors lost money.
Declining to become a fortune teller, Weldon said the signs were that equity strength would continue.
"There's some positive sentiment. When things are going well, people are often concerned about what's going to go wrong and I haven't heard that for a while.
"So hopefully this is a psychological change."
