MARKET CLOSE: NZ shares fall, led by Pacific Edge
MARKET CLOSE: NZ shares fall from record, led by Pacific Edge
By Suze Metherell
May 5 (BusinessDesk) – New Zealand shares fell from a record as investors cashed in recent gains in growth and energy stocks. Pacific Edge led the benchmark index lower, with Xero and a2 Milk Co pacing the decline.
The NZX 50 Index fell 32.658 points, or 0.6 percent, to 5200.253. Within the index, 26 stocks fell, 11 rose and 13 were unchanged. Turnover was $178 million.
The benchmark index closed at a record last week as markets bounced back from a global sell-off in biotech and computing stocks, which underpinned gains in local firms including Pacific Edge, Xero and a2 Milk. Investors locked in some of those gains, with Pacific Edge falling 3.6 percent to $1.08. Xero fell 1.9 percent to $31.35 and a2 Milk declined 1.3 percent to 79 cents.
“Investors were willing to pay up for growth and then it just reached a point where it got a bit out of hand and there is always the correction,” said James Smalley, director at Hamilton Hindin Greene. “People are looking for a bit of an excuse to take a bit out of the market – investors are a little bit more bird in the hand than two in the bush in regards to earnings.”
Energy stocks fell after gains over the past month. Contact Energy dropped 2.4 percent to $5.66, Meridian Energy slipped 2 percent to $1.20, and MightyRiverPower dropped 1.1 percent to $2.31. Outside the benchmark index, Genesis Energy declined 0.5 percent to $1.85.
“It’s not just in the growth companies coming in for selling, but also some of these larger cap companies that were maybe trading on multiples a little bit on the high side,” Smalley said. “With the absence of any specific corporate news investors are happy to take a bit of profit off the top.”
Fletcher Building, New Zealand’s largest listed company, fell 0.1 percent to $6.05. Telecom, the nation’s biggest telecommunications provider, dropped 0.7 percent to $2.665 while Air New Zealand declined 1.4 percent to $2.10. Ryman Healthcare, the retirement village operator, slid 2.1 percent to $8.70.
OceanaGold led gainers, up 4.3 percent to $2.92. Precinct Properties rose 1.4 percent to $1.06. Outdoor goods retailer Kathmandu Holdings climbed 0.8 percent to $3.66.
Stock market operator NZX climbed 0.8 percent to $1.26 after it said New Zealand share trading rose for the 20th consecutive month in April.
Outside the benchmark index, Sanford rose 0.7 percent to $4.29. The fishing company agreed to buy the assets of GreenShell NZ Limited and Greenshell Investments from the receivers of the mussel farming and processing group.