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Local shares rise after FBI clears Clinton

NZ NewswireNZ Newswire 7/11/2016 Sophie Boot
© Hagen Hopkins/Getty Images

New Zealand shares jumped 1.9 per cent in a global rally following the US Federal Bureau of Investigation confirming no criminal charges are warranted against Democratic presidential candidate Hillary Clinton.

The S&P/NZX50 rose 123.98 points, or 1.9 per cent, to 6,832.45 as at 2.20pm. That's the biggest per centage gain in eight months, according to Reuters data. Within the index, 40 stocks gained, with eight unchanged and three down.

FBI director James Comey said in a letter to Congress that new emails discovered during its investigation into Anthony Weiner "have not changed our conclusion" that Clinton committed no criminal wrongdoing in using a private email server for government work.

"That FBI news has, in investors' minds, put her back in frontrunning for the presidency, the market would react quite negatively if Trump was successful," said Grant Williamson, director at Hamilton Hindin Greene.

Global markets have become increasingly unsettled at the prospect of Clinton's rival, Donald Trump, succeeding in his bid for the White House since a letter from Comey on Oct. 29 announced the FBI was reviewing emails found in the unrelated investigation into Weiner.

The Chicago Board Options Exchange Volatility Index, or VIX, known as Wall Street's fear gauge, rose to a five-month high at its last trade on Nov. 4.

The local market has been sold off in the past month, hitting a four-month low of 6,708.47 on Friday, extending the correction which it reached a day earlier. Foreign and domestic investors have been selling heavily in the expectation that the low interest rate environment enjoyed by the market for some years is coming to an end, with the US Federal Reserve expected to raise interest rates this year.

"The bargain hunters have certainly come back into the market," Williamson said . "Investors have been looking an excuse, the market has declined from pretty high levels and it's brought more value back into the market."

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