MARKET CLOSE: Contact leds sharemarket down

Wednesday 2nd June 2010

New Zealand shares fell for a second day after Japan’s prime minister stepped down and Australia reported moderating economic growth. Guinness Peat Group, Kathmandu Holdings and Contact Energy paced the decline.

The NZX 50 Index fell 35.86, or 1.2%, to 3018.89. Within the index, 29 stocks fell, eight rose and 13 were unchanged. Turnover was $78.8 million.

Stocks fell across Asia today after Japan’s Prime Minister Yukio Hatoyama resigned, six weeks before mid-term elections, stoking concern the world’s second-largest economy faces a period of political instability.

The Nikkei 225 Index fell 1%. Commodity stocks fell across the region after the US government began a criminal probe into BP Gulf of Mexico oil leak. Australia’s S&P/ASX 200 Index dropped 0.5% after government figures showed the economy grew 0.5% in the first quarter, slowing from a revised 1.1% pace in the fourth quarter of 2009.

Guinness Peat (NZX: GPG ), which last month failed to deliver on plans for a capital return to shareholders, fell 5.6% to 68 cents.

Kathmandu (NZX: KMD ) dropped 4.6% to $1.85.

Contact (NZX: CEN ) fell 2.9% to $5.76. Pan Pacific Petroleum (NZX: PPP ) declined 3.9% to 25 cents, the lowest since early December, and New Zealand Oil & Gas (NZX: NZO ) dropped 3.6% to $1.36.

Rakon (NZX: RAK ) fell 3.2% to 90 cents. The stock has declined 35% in the past 12 months, while the NZX 50 Index rose almost 10%. The company’s full-year gross margin was 4% below the forecast of Goldman Sachs JB Were analyst Tristan Joll, who rates the stock a ‘hold,” according to ShareChat.

Pyne Gould (NZX: PGC ) rose 2.2% to 46 cents, its second daily advance of that size after the company said it is in talks to merge its Marac finance unit with Canterbury Building Society and Southern Cross Building Society to create a bank with $2.2 billion of assets.

PGG Wrightson (NZX: PGW ) dropped 1.8% to 55 cents. A drop in prices at Fonterra’s milk powder sale may herald weaker world prices for dairy products, potentially eating into incomes of Wrightson’s rural customers.

Businesswire.co.nz

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