Monday 07 November 2016 02:26 PM
NZ shares jump 1.9% after FBI clears Clinton, bargain hunters return
By Sophie Boot
Nov. 7 (BusinessDesk) - New Zealand shares jumped 1.9 percent 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/NZX50 rose 123.98 points, or 1.9 percent, to 6,832.45 as at 2.20pm. That's the biggest percentage gain in eight months,
according to Reuters data. Within the index, 40 stocks gained, with eight unchanged and three down.
This morning local time, 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. "The market has been
pretty nervous as Trump got closer in the polls, and we're expecting a volatile week until we know the results."
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."
(BusinessDesk)