MARKET CLOSE: NZ shares fall, led by Xero, Fletcher as investors grow more risk averse

Ongoing jitters about US politics pushed New Zealand stocks lower as investors took risk off the table, with Xero, Fletcher Building and A2 Milk leading the decline on the local bourse.

The S&P/NZX 50 Index fell 51 points, or 0.7 percent, to 7,371.76 Within the index, 37 stocks fell, 10 rose and three were unchanged. Turnover was $154 million.

"The correction we have been waiting for has arrived overnight, with the catalyst being concern over (US President) Donald Trump's presidency," said Greg Smith, head of research at Fat Prophets in Auckland. Smith said global markets - the US in particular - had been primed for a correction after a strong run of late. The Dow and S&P 500 both sank about 1.8 percent overnight following reports that Trump tried to influence a federal probe, according to Reuters. 

"I think the market has been looking for a reason to sell-off and now has that excuse," said Smith. However, given that investors still need somewhere to park their money - in particular as global interest rates remain low -  "I don't think there's going to be a serious lurch to the downside. I think it will be a relatively mild correction," he added.

Dual-listed Westpac Banking Corp fell 4.1 percent to $33.36 as it traded ex-dividend while Australia and New Zealand Banking Group lost 1.3 percent to $31.10 as Australian banking stocks continue to suffer after a tax on liabilities was proposed in the budget. 

Xero fell 2.7 percent to $23.20 as investors opted to sell "on a down market day with risk coming off the table," said Smith.

Fletcher declined 2.4 percent to $7.99 while A2 Milk lost 1.4 percent to $3.51.  Mainfreight also came in for some selling pressure, falling 1.6 percent to $22.05  while Kathmandu Holdings ended down 1.5 percent at $1.92.

"It's not overly alarming to see profits taking off the table when risk comes off," he added. Overall, the New Zealand story remains positive, said Smith, pointing to upbeat consumer confidence data earlier in the session.

Pushpay Holdings, whose mobile payment app allows churches to raise money from parishioners, said its annual loss widened to US$25.3 million in the year ended March 31, from a loss of US$13.1 million a year earlier. The shares ended down 4.6 percent at $1.68. 

Rakon tumbled 7.1 percent to 19.5 cents after it posted a wider full-year loss after sales fell 16 percent and the company recognised an impairment against its Centrum Rakon India joint venture.

In the other direction, Goodman Property Trust and Infratil both gained after their earnings reports. Goodman Property Trust, reported a 9 percent decline in full-year net profit on a deferred tax payment and lower investment property but the result was in line with expectations and the company maintained its cash distribution per unit guidance for the current financial year. The stock added 1.2 percent to $1.255. 

Infratil added 0.3 percent to $3.00 after that company beat annual earnings guidance. Underlying earnings before interest, tax, depreciation, amortisation and fair value movements in financial instruments rose 12 percent to $519.5 million in the 12 months ended March 31, beating Infratil's March guidance for ebitdaf of between $485 million and $505 million.

New Zealand Refining led gainers on the market, rising 1.2 percent to $2.47. 

Ryman Healthcare, due to report tomorrow, shed 1.4 percent to $8.63. 

(BusinessDesk)