22 Sep 2014

Markets gain on election result

2:00 pm on 22 September 2014

The money markets have reacted positively to National's resounding election victory.

The stock market has risen more than 1 percent while the dollar edged up.

Analysts had expected investors to be cheered by National's clear cut victory and that has proved to be the case in early trading.

Electricity shares surged in the wake of Saturday's general election result.

Investors were celebrating the fact that the Labour-Green electricity policy will not be implemented now.

Salt Funds Management's managing director, Paul Harrison, said the market had already priced in a National-led government, but the strength of the election result seems to have galvanised investors.

Meridian's installment receipts led the charge, opening more than 10 percent higher before easing back a little, while Mighty River Power's shares surged back to over their $2.50 issue price for the first time since May last year.

Meridian would have been the most affected power company, if the Labour-Green policy had been introduced.

The dollar gains have been muted, with the Kiwi rising a quarter of a cent against its American counterpart.

Senior foreign exchange strategist at ANZ Sam Tuck said the mood is definitely upbeat, though the New Zealand dollar will likely continue under pressure.

The currency is 8 percent below its most recent peak in July.