The S&P NZX 50 opened at 12799 on Tuesday, up 1.89 percent.
The rise follows record highs in the Dow Jones Industrial Average, boosted by Joe Biden winning the closely contested US election and news of a successful large scale clinical trial of a COVID-19 vaccine, developed by Pfizer and German partner BioNTech.
Over the day, the Dow Jones Industrial Average rose by 3 percent and the S&P 500 was up 1.2 percent. The NASDAQ was down, reflecting a move away from tech stocks.
Andrew Kelleher, director at JMI Wealth said given European and US markets were up strongly overnight, the rise in the NZX 50 is smaller than expected. But as industries aren't as widespread, fluctuations tend to be more muted than offshore markets.
"We've had a pretty good run in the NZX 50 over the last week...we're on our sixth positive day in a row now," Kelleher said.
US futures market trading showed some of the gains seen throughout the US tradiing day were given back. NASDAQ futures went lower. Although the vaccine trial is positive, as information is digested, competing forces come into play. An example is concern about the impact of liquidity being withdrawn.
"Maybe you don't need quite as big a stimulus package from the US Government and not as much monetary policy accommodation from the Federal Reserve... cheap money is like crack cocaine for the share markets," Kelleher added.
Market movements on Tuesday show share prices for many travel and tourism-related companies went up, including Air New Zealand and Auckland International Airport. Following Fletcher Building's positive trading update, the share price was up 11 percent.
- Vista group, up 13 percent.
- Tourism holdings, up 10 percent.
- Serko, up 7 percent.
- Fletcher Building, up 11 percent.
Frank Jasper, chief investment officer at Fisher Funds, said news of a COVID-19 vaccine and stimulatory economic conditions remove uncertainty and provide a better backdrop for financial returns.
But as there are many moving parts below the surface, it's important to take a long-term view.
"Some companies are very sensitive to economic growth, on the flipside, some of those companies that have been benefiting, such as home decor companies, may come under a bit of pressure," he said.