The NZX 50 Index climbed to a fresh high as investors hunt for income paying investments on the prospect of interest rates staying lower for longer, as the European Central Bank embarks on a sovereign debt buying programme.
Overnight the ECB confirmed it will launch a bigger-than-expected 60 billion euro a month bond purchase programme to stimulate the region's economy and boost inflation. It follows the US Federal Reserve's own quantitative easing programme, which wrapped up last year and saw equity markets flooded with cash. Investors bought dividend paying stocks on anticipation global interest rates will be lower for longer.
The NZX 50 Index jumped up some 66 points, or 1.2 per cent, to a record 5712.661. It recently traded at 5699.891. Markets across Asia also advanced, with Japan's Nikkei 225 Index climbing 1 per cent while Australia's S&P/ASX 200 Index surged 1.2 per cent in afternoon trading.
"We're following the offshore markets, we have Australia up 1 per cent as well," said Grant Williamson, a director at Hamilton Hindin Greene. "Europe is on the agenda at the moment, and what they might do. Investors will be hoping what turned out to be a very successful policy in the United States will turn Europe around as well.
"You normally see a reduction in interest rates, so you see investors looking for a home that offers the best growth and yield prospects," Williamson said.