Record highs in NZ, US trading: Nintendo soars, Twitter slumps


The bulls are storming across world stock markets.

Both the New Zealand and United States markets have set new records, while Japanese company Nintendo has soared in value following the release of its blockbuster Pokemon Go game.

The S&P/NZX50 index, which measures New Zealand's 50 largest listed companies, rose 0.9 percent yesterday to a new record of 7062 points.

On Wall Street the S&P500 today hit a new all-time high in trading, breaking a previous record set back in March 2015.

Investors are pouring money into the New Zealand market because many locally-listed companies are paying relatively high dividends of between five and seven percent.

That is better than investors will get from a term deposit. It is also a higher dividend yield than many international companies typically pay.

Sectors ranging from banking to construction to tech all made gains on the New Zealand market on Monday.

On Wall Street the S&P500 today hit a new all-time closing high.

Earlier the European markets made gains as well, with the UK FTSE100 rising 1.4 percent, Germany's DAX adding 2.12 percent and France's CAC40 rising 1.76 percent.

The search for "yield" in a low interest rate world is also driving up international markets.

The rally has been helped by a better than expected US jobs report that was released last Friday.

The report eased concern that the US economy might slip into recession. At the same time however the report was not strong enough to suggest the US Federal Reserve will be in a hurry to hike interest rates.

Many companies' valuations appear stretched. But analysts say that as long as interest rates remain low it is likely investors will keep putting money into stocks.

Where the markets go in the next few days will be determined by the release of earnings reports for the June quarter.

Investors have also welcomed Japanese Prime Minister Shinzo Abe's landslide victory in the upper house of parliament. They believe this has increased his chances of being able to push through his economic reforms, despite their unpopularity with many Japanese citizens.

Japan's Nikkei index rose 3.98 percent.

Japanese company Nintendo has risen US$7 billion dollars ($NZ9.7b) in value in two trading days.

Nintendo rose 25 percent in value yesterday, after rising nine percent on Friday.

Investors are betting on the company in the wake of the release of Pokemon Go.

The game has topped gaming charts in markets like the US. It will soon be launched in the world's single biggest gaming market, Japan.

The company has struggled in the console market against rivals like Sony. But investors are hoping that Pokemon Go is a sign that Nintendo can do better in the mobile gaming market.

It has around half a dozen other mobile games planned for the next year, and the company has some strong intellectual property from characters like Super Mario Brothers.

It is a far different story for Twitter.

The stock fell almost two percent today, after two analysts downgraded their expectations for the stock. They are concerned the company is not going to be able to grow its active user base, nor its advertising revenue.

The company is trading at just over US$17 and has fallen around thirty percent in value since it listed on the US market in November 2013.