"We've had a little bit of clarity around level 3, which it looks like we will move to given single-digit cases today," Smith said.
That optimism was bolstered by reports that a Covid–19 treatment being tested by Gilead had shown promising results. The American biotechnology company's stock price jumped 16 per cent on the news and provided further excitement for investors looking toward the end of the outbreak crisis.
Shane Solly, a portfolio manager at Harbour Asset Management, said that although the report had not been confirmed, it was giving investors a reason to buy.
"There is a lot to be positive about with New Zealand looking to move out of lockdown and perhaps be a country with a relatively low impact from the virus outbreak," Solly said.
He said as we "passed the crater," local companies that were caught in the eye of the storm have recovered strongly this week.
Tourism Holdings led the market higher, increasing 13.7 per cent to $1.41 on the improving virus outlook. However, Fat Prophets' Smith warned investors may be getting ahead of themselves as the future of tourism remained uncertain.
SkyCity rose 10.5 per cent to $2.53. Smith said moving to level 3 didn't mean consumers would be flocking back to the casino, although he noted the stock had been heavily sold throughout the downturn.
Vista Group International advanced 6.4 per cent to $1.49, well above the $1.05 price investors are paying in its $65m capital raising. Harbour's Solly said the cinema software company had found strong support after raising money and was now in a strong position.
"Movie visitation is very constrained so any news that may ease that constraint will provide a rally," he said.
Among other companies to have recently raised capital, Kathmandu Holdings increased 5.3 per cent to 79 cents and Auckland International Airport rose 2.7 per cent to $6.11.
Local courier company Freightways rose 3.4 per cent to $6.93, while global logistics group Mainfreight posted the day's biggest loss, falling 1.5 per cent to $37.43.
Air New Zealand fell 0.4 per cent to $1.31 as its rally eased after seeing strong gains across the week.
Vector was unchanged at $3.45. Today it joined other major lines companies in a plan to defer lines charges for business customers to help tide them through the downturn.
Power companies were stronger after the Electricity Authority released a new cost-benefit analysis for proposed changes to transmission pricing. Contact Energy rose 5.5 per cent to $6.53, Genesis Energy increased 3.2 per cent to $2.95, Mercury NZ advanced 2.3 per cent to $4.40, Meridian Energy rose 0.5 per cent to $4.37, and Trustpower edged up 0.2 per cent to $6.55.
The future of the Tiwai Point aluminium smelter - the country's biggest electricity user - remains an uncertainty hanging over the power companies. Today Rio Tinto said its strategic review of the smelter was continuing.
Of the dairy stocks, Fonterra Shareholders' Fund units fell 1.3 per cent to $3.80, A2 Milk Company rose 1.6 per cent to $19.81 and Synlait Milk advanced 2 per cent to $7.54.
Outside the benchmark index, PGG Wrightson jumped 12.9 per cent to $2.54. Rural Equities today sold its stake in the firm at $2.75 a share.
