New Zealand shares jumped on growing optimism among investors that US tech companies will deliver strong earnings in the current earnings season and that potential covid-19 vaccine trials are showing promise.
The S&P/NZX 50 Index gained 183.57 points, or 1.6 per cent, to 11,736.73. Within the index, 27 stocks rose, 15 fell, and eight were unchanged. Turnover was $153.1 million.
Asian markets took their cue from the tech-heavy Nasdaq Composite Index hitting a new record as vaccine data was released and investors looked towards US earnings season. Australia's S&P/ASX 200 was up 2.3 per cent in late trading while Hong Kong's Hang Seng rose 1.8 per cent.
The rush to buy was driven by corporate reporting in the US, where investors are hopeful technology companies will continue to lift earnings despite the pandemic.
"It's all about tech and high-multiple stocks being aggressively chased once more in that US market," said Matthew Goodson, director of Salt Funds Management.
Because the NZX has a limited number of technology stocks, upbeat investor sentiment translated into generalised buying across the board, he said.
Meanwhile, optimism that a covid-19 vaccine may be on the horizon after promising data from trials of three candidates also supported buying, but wasn't the only factor for local investors.
Goodson said some stocks set to benefit from a vaccine weren't outperforming, while others that have benefitted from the virus, such as Fisher & Paykel Healthcare, were among the leaders.
A2 Milk rose 3.3 per cent to $21.21, F&P Healthcare gained 2.7 per cent at $36.74, Infratil increased 2.8 per cent to $4.92 and Genesis Energy was up 3.2 per cent to $3.03.
Those heavyweight stocks drove today's gains, while virus sensitive stocks were mixed.
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Auckland International Airport rose 3.7 per cent to $6.44 and Air New Zealand advanced 2.7 per cent at $1.33, both outperforming the broader market. Meanwhile, Vista Group International increased just 1.6 per cent to $1.27 and Tourism Holdings was unchanged at $1.78.
"This is more a liquidity-driven rally as opposed to a news-driven rally," Goodson said.
"Exceptionally low central bank interest rate policies are forcing investors up the risk curve into equities."
Kathmandu Holdings led the market higher, rising 4.5 per cent to $1.16 and SkyCity Entertainment Group rose 4.1 per cent to $2.54.
Tech stock Pushpay Holdings rose 1.8 per cent to $7.81. Telecommunications firm Spark New Zealand was up 1.7 per cent to $4.84 and internet infrastructure provider Chorus fell 2.1 per cent to $7.31.
Fishery firm Sanford posted the day's biggest decline, dropping 2.9 per cent to $6.35.
Outside the NZX 50 benchmark, PGG Wrightson fell 2.7 per cent to $2.91 after it said it would report operating earnings between $23 million and $24 million for the June year. That was in line with the previous year, though down from its $30 million guidance that was subsequently withdrawn due to the pandemic.