MARKET CLOSE: NZ shares fall as profit takers enter market; Tower, MRP, Freightways decline

Wednesday 7th October 2015

New Zealand shares fell as investors looked to book recent gains in a volatile market. Tower led the benchmark index lower, followed by Freightways, MightyRiverPower and Steel & Tube Holdings.

The S&P/NZX 50 Index fell 18.08 points, or 0.3 percent, to 5650.03. Within the index, 23 stocks fell, 22 rose and five were unchanged. Turnover was $120 million.

The benchmark index is up 1 percent so far this week, after declined 3.5 percent in the September quarter. Trading last quarter was marked by volatile markets as investors weighed the outlook for the US Federal Reserve to hike rates for the first time in a decade, while nervousness about China's growth outlook has spooked traders from equities as an asset class.

Tower, the general insurer, dropped 3.5 percent to $1.92. Freightways, the logistics and courier firm, slid 2.6 percent to $5.57. MRP, the energy generator and retailer, declined 2.6 percent to $2.425. Steel & Tube, the steel manufacturer, fell 2.2 percent to $2.64. Auckland International Airport, the nation's busiest gateway, retreated 2.2 percent to $4.89.

"There has been a wee bit of momentum going over the last few days but I think in this market volatility is still going to be there," said Robert Garden, investment adviser at Craigs Investment Partners. Local stocks fell after a "reasonable run in the last few days" as investor looked to crystallise the gains.

Z Energy rose 0.7 percent to $6.07. Last week Infratil sold its 20 percent stake and the New Zealand Superannuation Fund halved its stake to 10 percent at $6 a share.

"It took them a day or two to digest the large placement after the sale of Infratil and the Super Fund, but it's now above that placement price," said Grant Williamson, director at Hamilton Hindin Greene. "It was demand and supply after the placement but fundamentals will come back into play there."

Overnight, dairy prices rallied 9.9 percent increasing for a fourth consecutive time after nearly six months of declines. Units in Fonterra Shareholders' Fund, which give holders access to Fonterra Cooperatives Group's dividend stream, rose 1.5 percent to $5.30.

Summerset Group advanced 1.7 percent to $3.66. The retirement village developer and operator raised annual earnings guidance after sales climbed 64 percent in the third quarter and in anticipation of increased activity in the final three months of the year, when residents move into its new Wigram village.

"Nice positive news from them making the share price trade higher, but it has been drifting somewhat in recent times," Williamson said. "Investors will be encouraged by the positive signs."

Metlifecare rose 1.2 percent to $4.29. The rival retirement village operator has entered into a conditional agreement to buy land in Auckland's North Shore for an undisclosed sum as part of its proposed $300 million village project.

Xero, the cloud-based accounting software firm, was the best performer on the day climbing 4.4 percent to $15.97.

Air New Zealand, the national carrier, advanced 3.4 percent to $2.58 after the company's annual meeting in Auckland today.

BusinessDesk.co.nz

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