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NZ stocks rally after US election

NZ Newswire logoNZ Newswire 9/11/2016 Sophie Boot

New Zealand shares rallied in early trading, regaining ground shed in the immediate aftermath of Donald Trump's victory, as equity market investors deemed the change at the White House would benefit US economic growth.

The S&P/NZX 50 Index had its biggest fall in almost eight years yesterday, down 3.3 per cent on the day as it became increasingly apparent Trump would take out the US presidential race, with every stock on the benchmark index dropping.

Ten minutes after the market opened this morning, the local index had risen 3.3 per cent, or 220.74 points, to 6,864.95.

Some 43 stocks rose, seven were unchanged and one was trading lower. The biggest winner was A2 Milk Co, up 10.2 per cent to $2.16, while Heartland Bank rose 5.6 per cent to $1.50.

Markets across Asia were unsettled on Wednesday afternoon but US stocks gained sharply overnight local time as Wall Street came to terms with the political upset. The Dow Jones Industrial Average rose 1.4 per cent and the Standard & Poor's 500 Index climbed 1.1 per cent.

"Obviously we were at the forefront of trading as all news was coming out and there was an immediate huge reaction which is unwinding to a degree today, particularly after the US bounce," said Matt Goodson, managing director at Salt Funds Management.

"We have a very large portion of yield-sensitive stocks, with the gentailers, Spark, Auckland Airport and the property stocks in our market. It'll be very interesting to see what happens once these initial short-term reactions play out."

Meanwhile, the CRB Index of commonly traded commodities rose 0.2 per cent overnight, despite concerns that a Trump presidency will discourage global trade given he campaigned against the Trans-Pacific Partnership agreement.

The trade-weighted index was virtually unchanged from Wednesday at 78.65, as the kiwi rebounded against the Japanese yen but fell against the US dollar.

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