In Thursday morning trading, New Zealand's stock market experienced a significant surge, climbing 451 points, or 3.8%, to reach 12,258. This uptick marked a recovery from the previous session's losses, driven by positive momentum from Wall Street. The catalyst for this rally was U.S. President Trump's announcement of a temporary 90-day suspension of reciprocal tariffs for all countries, except China, to facilitate ongoing trade discussions. Consequently, the reciprocal tariffs that had been implemented on Wednesday were immediately lowered to 10%, whereas tariffs on China saw a substantial increase of 125%.
On the domestic front, the Reserve Bank of New Zealand (RBNZ) reduced its official cash rate by 25 basis points, bringing it down to 3.5%, aligning with expectations. The RBNZ also indicated potential for further rate cuts due to heightened global economic uncertainties affecting growth and inflation. This rate cut provided a boost across nearly all sectors, with producer manufacturing, consumer goods, and financials showing the most significant gains.
Despite the rally, further advances were tempered by investor caution in anticipation of China's Consumer Price Index (CPI) and Producer Price Index (PPI) data, set to be released later in the day, which could signal ongoing deflation risks. Notable gainers in the market included Mainfreight Ltd. with a rise of 9.8%, Infratil Ltd. up by 6.1%, and A2 Milk Co. increasing by 5.7%.
