NZ dollar rallies after Indian free trade deal; Wall St extends gains

The kiwi dollar gained against the greenback and yen after New Zealand closed a free trade deal with India to build on the $3.68 billion of annual imports and exports between the nations, which prime minister Christopher Luxon touted as an exciting opportunity for local exporters.

Stocks on Wall Street extended their rally in the Christmas-shortened trading week, with tech companies including Nvidia rising for another day, while Paramount Skydance and Warner Bros Discovery advanced as Oracle chief Larry Ellison personally guaranteed US$40 billion of financing for Paramount’s pursuit of the CNN owner.

Meanwhile, gold and silver prices hit new records overnight, buoying mining stocks such as Newmont and Barrick Mining, amid heightened tensions between the US and Venezuela as the superpower seized second oil tanker near the Latin American nation.

And Rocket Lab extended its run higher after securing its biggest ever contract with the US Space Development Agency, climbing another 9.1%.

Closer ties

The kiwi dollar rose to 57.97 US cents at 7am in Auckland from 57.67 cents yesterday and advanced to 90.93 yen from 90.74 yen, after New Zealand’s government confirmed reports that it’s agreed a free trade deal with India, with the agreement expected to be signed in the first half of next year.

The agreement will reduce tariffs on 95% of New Zealand exports into India, with sheep meat, wool, coal, forestry and seafood among the immediate winners, while tariffs on infant formula will be phased out and kiwifruit gets an expanded quota.

Coalition partner NZ First used the agree-to-disagree clause in opposing the agreement, which also includes a new skilled work visa for Indian migrants to New Zealand.

Stocks on Wall Street started the shortened trading week on the front foot, with the S&P 500 0.7% in late trading, while the tech-heavy Nasdaq Composite advanced 0.6%, with the likes of Nvidia and Tesla megacap stocks among the gainers.

Fly me to the moon

Local investor favourite Rocket Lab surged 9.1% to US$76.90 in late trading, enjoying the follow-on from the US$816 million contract with the US Space Development Agency.

Warner Bros Discovery rose 3.5% in late trading as the bidding war for the media group is set to escalate after suitor Paramount Skydance’s bid has a personal guarantee from Oracle chief Larry Ellison to the tune of US$40 billion. Paramount was up 4% in late trading, while Netflix – which won the initial bidding war – was down 1.5%.

Mining stocks such as Barrick and Newmont were among gainers, with silver and gold prices hitting records as geopolitical tensions mount after the US seized a second oil tanker near Venezuela. Gold futures were up 2% at US$4,473 an ounce at 7am in Auckland, while Brent crude oil futures rose 2.1% to US$61.94 a barrel.

Futures are pointing to Australia’s resources-heavy S&P/ASX 200 index nudging up 0.2% when trading opens across the Tasman today.

The ASX200 is heading for a 1% gain in December, while the S&P/NZX 50 index climbed into positive territory for the month after yesterday’s 1.3% surge.

Both antipodean indices are heading for positive years.

Reporting by Paul McBeth. Image from NZ government.