MARKET CLOSE: NZ shares dip; FRE, Pike decline

MARKET CLOSE: NZ shares dip with resources; Freightways, Pike fall

Oct. 29 (BusinessWire) – New Zealand shares fell, as fears the global recovery is less robust than hoped for weighed on commodities, resources stocks and banks. Pike River Coal, New Zealand Oil & Gas and Westpac Bank paced the decline.

The NZX 50 Index fell 7.16, or 0.2%, to 3195.62. Within the index, 27 stocks fell, 11 gained and 12 were unchanged. Turnover was $82 million.

Freightways Ltd., the courier and logistics firm, fell 4.8% to $3 after managing director Dean Bracewell told shareholders that the economic recovery was still “fragile” and without positive, organic growth, “the express package and business mail division’s near-term performance will continue to track below the prior year.”

Trucking firm Mainfreight Ltd. fell 2% to $5.32.

Pike River fell 2.7% to $1.09, Pan Pacific declined 3.6% to 53 cents and NZ Oil & Gas fell 2.3% to $1.69 as prices of commodities including copper and crude oil fell.

Stocks tumbled worldwide after weaker-than-expected new home sales in the U.S. Australia’s S&P/ASX 200 Index fell 2.2% and Japan’s Nikkei 225 Index declined 1.9% as ANZ Bank warned the recovery in Australia is “fragile,” China moved to tighten lending controls and PetroChina posted a 24% drop in third-quarter profit.

“All that you’re seeing here at the moment is market movements based on sentiment, based on fear, rather than being based on anything fundamental” said Angus Gluskie, who oversees about $420 million at White Funds Management in Sydney.

“In the early stages of the recovery investors were too bullish,” he said. “All of a sudden they’re realising recovery just doesn’t happen in two months – it takes time.”

Westpac Banking Corp. fell 2.6% to $32.35, tracking a slide in lenders on the S&P/ASX 200. Australia & New Zealand Banking Group’s NZX shares rose 0.9% to $28.75, though its ASX-listed stock, which is more heavily traded, fell 2.6% to A$22.74.

Fisher & Paykel Healthcare, the medical devices manufacturer that gets almost 80% of its sales in U.S. dollars, gained 3.3% to $3.10, the biggest advance on the NZX 50 today, as the kiwi dollar tumbled.

The New Zealand dollar fell to 71.82 U.S. cents from 72.74 cents immediately before Reserve Bank Governor Alan Bollard released his review of monetary policy today.

Bollard kept the official cash rate at a record low 2.5% and said there’s “no urgency to begin withdrawing monetary policy stimulus.” A strong currency “has limited the scope for exports to contribute to the recovery and reinforces a bias towards domestic expenditure,” he said in his statement.

Skellerup Holdings fell 5.4% to 53 cents, the biggest decline on the NZX 50 today. New Zealand Refining, the nation’s sole oil refinery operator, fell 4.7% to $5.12.

(BusinessWire)

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