New Zealand shares rallied to a four-month high as some investors were encouraged by better-than-expected US jobs data and continued central bank support.
The S&P/NZX 50 Index rose 56.18 points, or 0.5 per cent, to 11,558.70 — the highest close since March 5. Within the index, 23 stocks rose, 22 fell, and five were unchanged. Turnover was $123.8 million.
Share markets across Asia rose to their highest level since the end of February, based on the MSCI Asia Index.
Today's rally was driven by reports that nonfarm jobs in the United States increased by 4.8 million in June, beating the expectation of economists who predicted a lift of 3 million jobs.
The recuperating job market had been taken by some investors as a signal of wider economic recovery and bolstered market sentiment, ASB economist Mark Smith said.
Michael McCarthy, chief market strategist at CMC Markets, said the market was reacting to the good data and ignoring the bad.
"Released alongside that very strong nonfarm payrolls we saw an increase in unemployment claims and weak durable goods orders," he said. "But that doesn't seem to faze the market."
That indicated markets were being driven by the flood of money central banks were pumping out, with good news just acting as a catalyst to buy.
"Further evidence for that is the gains we are seeing in bonds and the fact that gold prices remain near seven-year highs," McCarthy said.
Trading volumes have been lighter than usual during the past week, which McCarthy said may be a reason to be suspicious of the rally. Anecdotally, retail investors were driving up prices while institutions had already sold down their portfolios, he said.
"Enthusiastic individual investors are pushing prices, but the pros who are concerned don't have anything to sell to them."
The leaders on the local benchmark today were mostly stocks considered to be defensive in nature.
Internet infrastructure provider Chorus was up 3.8 per cent at $7.67 and Contact Energy gained 3.7 per cent at $6.70.
Retirement property developer Summerset Group Holdings rose 3 per cent to $6.59 and Stride Property advanced 2.7 per cent to $1.91.
Fuel retailer Z Energy rose 2.2 per cent to $2.81, while New Zealand Refining Company dropped 3.9 per cent to 74 cents.
Fisher & Paykel Healthcare slipped 0.4 per cent to $34.50. The stock is up 7.8 per cent this week following on from its blockbuster earnings result on Monday.
Among other exporters, Pushpay Holdings dropped 3.6 per cent to $9.06, Tourism Holdings fell 1 per cent to $1.90 and Skellerup Holdings edged 0.5 per cent lower to $2.12.
Kathmandu Holdings posted the day's biggest decline, dropping 5.5 per cent to $1.20. Yesterday, the retailer bounced 11 per cent after it said it would be profitable at an operational level for the rest of the year. The stock is still up 4.4 per cent this week.
Market operator NZX held at $1.42. Total equity trades in June almost tripled from a year earlier. The total value of trades was almost double those last June at $5.2 billion.
Outside of the benchmark, Pacific Edge shares more than doubled in value on confirmation of acceptance under a key US medical regulation for its Cxbladder cancer test. The shares jumped 103.7 per cent to 55 cents from 27 cents yesterday.