While economists warn the wider economy will not benefit instantly from a lower dollar, brokers say the kiwi's recent plunge has already given a welcome boost to the sharemarket.
The kiwi hit an 18-month low of 64.67USc yesterday before closing at 65.01USc, taking its fall to 2.25 per cent for the week.
At the same time, the benchmark NZSX-50 index has moved higher. Although it eased a little as the kiwi recovered, especially against the aussie, at 3449.5 it is up 1.23 per cent on Friday's close. Tuesday's close of 3458.68 took it within 11 points of last October's all-time closing high.
Amro Craigs Equities retail adviser Bryon Burke said: "Certainly the rally over the last few days has been put down to the falling dollar.
"It's almost a relief rally for some stocks because they have had just the opposite for some months."
Burke said stocks to benefit from the kiwi's fall included pure exporters, companies with exposure to the rural sector, firms with significant overseas asset bases and dual listed companies.
Wood processor Tenon closed 11c higher at $3.26, despite yesterday reporting an 82 per cent fall in first-half operating profit. Fisher & Paykel Healthcare also rose 11c to $3.88 and Fletcher Building was up 8c to $8.05.
PGG Wrightson was up 10c to $1.89, while Allied Farmers was up 15c to $2.25.
Forsyth Barr broker Suzanne Kinnaird said the kiwi's move in the past few days had vindicated brokers' recommendations early this year to switch money out of the local market into overseas investments to take advantage of the predicted fall in the currency.
Falling kiwi gives the sharemarket a welcome lift
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