Harvey Norman Holdings Limited (ASX: HVN) came out firing on Wednesday with its shares jumping by as much as 6.8% to $4.70. While they have since retreated to $4.60, they're still trading a healthy 4.6% higher for the day.
While the company hasn't released any news, today's gains can be attributed to Joe Hockey's latest Federal Budget. On Tuesday evening, the treasury said that it was offering a $20,000 tax break on purchases made by small businesses that generate less than $2 million per annum in an effort to stimulate greater spending and economic growth.
Complementing this move, the government has also made work laptops, phones and tablets exempt from fringe benefits tax which should generate significant demand for those items. This would undoubtedly bode well for Harvey Norman, together with fellow retailers JB Hi-Fi Limited (ASX: JBH) and Dick Smith Holdings Ltd (ASX: DSH).
Notably, shares of JB Hi-Fi and Dick Smith also lifted 2.5% and 2.8%, respectively. All in all, the market appears to have responded well to Hockey's second budget with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) up nearly 0.5%.
Following an agonising run over the last week or two, investors will certainly be hopeful that this is just the beginning of a sharp turnaround.
