Labour's big budget boosts sharemarket
The S&P/NZX 50 Index rose 155.67 points, or 1.3%, to 12,437.17. Within the index, 21 stocks fell, 27 rose and two were unchanged. The index is still down 7% year-to-date.
The Labour party’s newest budget cast an encouraging light on the economy with a pledge to spend an additional $8 billion to $12b on infrastructure and an extra $440 million per year on new benefits.
“There is no doubt in our minds that the stimulus provided will provide further impetus to the economy in the immediate future,” BNZ economists said in a note.
“Beneficiaries have a very high marginal propensity to consume so this money will flow through to the communities in which they live. And, generally, investment activity will have positive direct and indirect impacts on the economy”.
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