MARKET CLOSE: NZ shares fall in global sell off; ANZ, Westpac, Fletcher decline

Monday 21st September 2015

New Zealand shares fell in a global sell off, as investors were cautious about economic growth. Fletcher Building led the bourse lower, while Westpac Banking Corp and Australia and New Zealand Banking Group declined.

The S&P/NZX 50 Index dropped 28.53 points, or 0.5 percent, to 5683.52. Within the index, 26 stocks fell, 17 rose and seven were unchanged. Turnover was a lighter than usual $89.3 million.

Markets across Asia fell, as traders digest last week's US Federal Reserve decision to keep interest rates near zero, saying "recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term". There is concern growth in China, the world's second largest economy, is faltering, which may have wider implications for global growth.

Australia's S&P/ASX 200 Index dropped 2.7 percent in afternoon trading, Japan's Nikkei 225 Index fell 2 percent and Hong Kong's Hang Seng declined 1.3 percent.

The Fed highlighted that last week's rate review "came at a bad time - Chinese growth is slowing and some people believe it's going to be a hard landing," said Rickey Ward, NZ equity manager at JB Were. "We don't - we have the view that yes it is slowing, but it is still healthy growth on a healthy number of year's gone by. The commentary from the Fed just highlighted that.

"What it's done has made people realise that actually global growth may be slowing, so there are a few things which are creating an element of unease and markets seem to be taking a bit of a breather until they get some clarity around some of these data points," Ward said.

Dual-listed companies dropped. Fletcher, the construction and building supplies firm, fell 3.9 percent to $7.24. ANZ declined 3.3 percent to $31.15. Westpac fell 3.4 percent to $34.52. Sky Network Television, the country's dominant pay TV provider, dropped 1.8 percent. Summerset Group Holdings, the retirement village operator, slipped 1.8 percent to $3.70. Air New Zealand, the national carrier, fell 1.6 percent to $2.46. Trade Me Group, the online auction website, declined 1.6 percent to $3.69.

New Zealand Refining Company advanced 1.2 percent to $3.50. The oil refiner marked its first day on the benchmark index, after it overtook Pacific Edge to enter the top 50 stocks. Outside the benchmark index, biotech firm, Pacific Edge rose 6.3 percent to 51 cents.

Kathmandu, the outdoor goods chain which was the target of a failed takeover bid by Briscoe Group, rose 5.7 percent to $1.48. Briscoe, the homewares and sporting goods retailer, declined 4.1 percent to $2.83.

BusinessDesk.co.nz

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