Investors returned to sharemarkets last month with most indices showing positive monthly returns.
Forsyth Barr broker Peter Young yesterday said there seemed to be more confidence coming into the markets, which investors were liking.
"It is creating a bit of momentum. The New Zealand stock exchange tracks the offshore markets, especially the United States. So with the Dow Jones being up 4% for the month, we have followed suit with a fairly good positive gain."
Of note was the performance of retail stocks like The Warehouse, Hallenstein Glasson and Restaurant Brands, he said.
Share prices of all those companies had been lagging for the past four months and with the outlook looking brighter, investors had been buying stocks that might have been oversold, Mr Young said.
The NZX-50 rose 2.3% in April, with the tech-rich Nasdaq gaining 3.3%, and the Standard & Poor's 500 gaining 2.8%.
Concerns that the United States market would pull back after earnings had been offset by favourable corporate outlooks and expectations of continued easy-money policies from the Federal Reserve that had fuelled runs in speculative assets, Mr Young said.
Robust corporate earnings, ample liquidity from the Federal Reserve and the prospect of ultra-low interest rates for the rest of the year had sparked confidence in the markets, pushing the Nasdaq to a 10-year high and lifting the S&P 500 more than 8% this year.
Mr Young said the major US stock indices also hit new yearly highs last week.
The NZX-50 on Friday reached its highest intraday level in nearly three years at nearly 3520.
In the United States, stocks rose on Friday on strength from Caterpillar and other industrials, lifting the Dow and Nasdaq to their best monthly performance since December.
"Now that earnings are coming in, the investment community is telling you that once some of these negative issues subside - sovereign debt, Middle Eastern tensions - this market is going to rip," Jason Weisberg, managing director at Seaport Securities Corp, said.
With May, the US markets were heading into a typically weak period. May had been the fourth-weakest month for the Dow, averaging a 0.2% gain since 1950, according to the Stock Trader's Almanac. May normally marks the start of the worst six months of the year for the industrial stocks.
