Core inflation excluding the volatile energy and food prices reached 6.6 per cent, the highest since August 1982, and overall inflation was 8.2 per cent, down from 8.3 per cent in August and 9.1 per cent in June.
Shane Solly, portfolio manager with Harbour Asset Management, said: "Some components of the CPI are falling behind and investors are seeing some evidence that inflation may be near the peak.
"The million-dollar question for the capital markets is how close is it for central banks to ease their monetary tightening. I think there are still two or three interest rate hikes to go."
He said investor sentiment also improved with the unwinding of risky hedging positions involving the Credit Suisse Bank and the Bank of England ending its liquidity support.
On Wall Street, the Dow Jones index rose 827.87 points or 2.83 per cent to 30,038.72 points; S&P 500 increased 2.6 per cent to 3669.91, breaking a six-day losing streak; and Nasdaq Composite gained 2.23 per cent to 10,649.15.
Across the Tasman, the S&P/ASX 200 Index was up 1.77 per cent to 6760 points at 5.45pm NZ time.
At home, Fisher and Paykel Healthcare rallied from its low, rising 60c or 3.31 per cent to $18.70 on trade worth $4.8m; Mainfreight was up 48c to $66.48; Ryman Healthcare gained 6c to $8.54; and Mercury Energy increased 5c to $5.25.
Spark, up 6.5c to $5.135, has completed the sale of 70 per cent of its cell towers to the Ontario Teachers' Pension Plan Board for $900m. Spark has a 15-year agreement to access existing and new towers, with a building commitment of 670 sites over the next 10 years.
Auckland International Airport gained 6.5c to $7.20 after telling the market that total passengers of 1.122 million in August were 67 per cent of the pre-Covid volume in the 2019 year ending June. September's 1.175 million was 71 per cent of the pre-Covid volume.
Subsidiary Queenstown Airport was higher than pre-Covid levels, with 208,832 and 195,782 passengers in August and September passing through during the ski season.
Genesis Energy increased 6c or 2.29 per cent to $2.68 after upgrading its 2023 full-year operating earnings (ebitdaf) to about $500m, from $455m. Genesis said trading was better than expected in the first quarter because of higher hydro inflows and thermal generation flexibility.
Skellerup Holdings recovered 7c to $5.04; Restaurant Brands rebounded 15c or 2.17 per cent to $7.05; Seeka was up 9c or 2.29 per cent to $4.02; Ventia Services gained 6c or 2.11 to $2.91; Arvida increased 4c or 3.01 per cent to $1.37; and Napier Port rose 14c or 5.04 per cent to $2.92.
The leading banks were again strong, with ANZ up 30c to $28.40, and Westpac rising 55c or 2.14 per cent to $26.25.
PGG Wrightson was down 13c or 2.97 per cent to $4.24; Infratil declined 14c to $8.10; Winton Land fell 9c or 3.77 per cent to $2.30; and a2 Milk decreased 15c or 2.46 per cent to $5.95.
Solly said a broker's research note indicated that a2 Milk's sales of infant formula in China were slowing. "That's not a huge surprise given some parts of China are in lockdown."
Other decliners were Gentrack, down 4c or 2.38 per cent to $1.64; Millennium & Copthorne Hotels NZ decreasing 5c or 2.56 per cent to $1.90; Argosy Property dropping 3c or 2.5 per cent to $1.17; Turners Automotive shedding 8c or 2.23 per cent to $3.50; and My Food Bag down 2c or 3.33 per cent to 58c.
Other gainers were The Warehouse Group, up 5c to $3.10; Tourism Holdings adding 5c to $3.05; Vista Group improving 5c or 3.16 per cent $1.63; AFT Pharmaceuticals increasing 9c or 2.65 per cent to $3.49; and Bremworth up 2c or 4.44 per cent to 47c.
