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MARKET CLOSE: NZ shares edge lower on thin volumes Trump inauguration awaited; NZ Refining falls

Friday 20th January 2017

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New Zealand shares fell on light volumes as investors await the inauguration of US president-elect Donald Trump and greater insight into his policy programme. New Zealand Refining dropped, while SkyCity Entertainment Group gained. 

The S&P/NZX 50 index declined 13.88 points, or 0.2 percent, to 7048.48. Within the index, 24 stocks fell, 16 gained and 10 were unchanged. Turnover was $128.7 million. 

Stocks on Wall Street dropped as investors second-guess what impact Trump will have on the world's biggest economy, which is growing at a fast enough pace to warrant a faster rate of interest rate hikes this year. The incoming US president was elected on a campaign pledging major infrastructure spending, tax reform, and more protectionist trade and immigration policies. Trump will officially take over the White House following his inauguration on Friday in Washington. 

"There's always a period of time when people are returning from holidays, but it seems to be slightly extended this year," said James Lindsay, who helps manage $400 million of NZ equities at Nikko Asset Management. "Markets have been waiting to get a bit more direction from Trump and his policies in the US and that might be contributing to some extent." 

NZ Refining led the benchmark index lower, falling 4 percent to $2.65. Brent Crude oil prices increased 0.4 percent after the International Energy Agency said oil markets had already been tightening ahead of agreed production cuts and it was too early to tell whether OPEC members were complying with the agreed supply reductions. 

Service station chain  Z Energy declined 0.4 percent to $7.36, while transport and logistics firm Mainfreight was down 1.9 percent to $21, and courier company Freightways fell 1 percent to $6.78. 

Power companies providing stable dividends also fell after US Federal Reserve chair Janet Yellen indicated several interest rate hikes may be needed this year, which would reduce the yield appeal of those stocks. Genesis Energy slipped 1.6 percent to $2.155, Mercury NZ was down 1.1 percent to $3.06 and Meridian Energy fell 1.1 percent to $2.685. 

Port of Tauranga, which owns half of PrimePort in the South Canterbury city of Timaru, fell 0.5 percent to $3.95 after rival Lyttelton Port Co said it container terminal staff were continuing their industrial action over plans to change their rostered hours. 

Casino and hotel operator SkyCity was the biggest gainer on the NZX50, up 1.6 percent to $3.94. Sky Network Television, which is awaiting a regulatory decision on whether its planned merger with mobile carrier Vodafone New Zealand can go ahead, rose 1.1 percent to $4.50. 

Infratil fell 0.3 percent to $2.92 after Accident Compensation Corp reduced its stake in the infrastructure investment firm. 

Fletcher Building was unchanged at $10.38, while Auckland International Airport increased 0.7 percent to $6.805. Spark New Zealand fell 0.9 percent to $3.50. 

Hellaby Holdings was unchanged at $3.58, with ASX-listed autoparts firm Bapcor getting closer to taking the company private, with its stake rising to 78.4 percent. Hellaby's board endorsed the $3.60-per-share offer this week, having previously deemed it to be too low.

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