Market close: NZ shares fall, led by Rakon - Fletcher, Telecom drop
BUSINESSDESK: New Zealand shares fell, led by Rakon, which drops out of the benchmark index next week, along with Steel & Tube. Telecom and Fletcher Building, the biggest companies on the bourse, paced the decline.
The NZX 50 Index fell 28.64 points, or 0.8%, to 3425.60. Within the index, 33 stocks fell, 10 rose and seven were unchanged. Turnover was a lower-than-average $68.8 million.
Equity markets were generally weaker across Asia, following declines on Wall Street as investors continued to fret that the bailout of Spain's banks won't help the nation escape the European debt crisis.
Telecom, the biggest company on the bourse, fell 1.9% to $2.385. Fletcher, the biggest construction company in New Zealand, declined 1.1% to $6.28.
“It has been disappointing - we were all expecting a rally on Wall Street following the Spanish bailout – but it’s really red ink across the globe and our market hasn’t been spared,” said Bryon Burke, head dealer at Craigs Investment Partners.
GPS components maker Rakon and building supplies manufacturer Steel & Tube led the fall. Shares in Rakon fell 2% to 48 cents, while Steel & Tube dropped 4.6% to $2.08. The two stocks fall out of the NZX 50 on June 18.
They will be replaced in the index by cloud-based accounting services firm Xero, up 3.5% to $4.50 today, and Diligent Board Members Services, whose iPad application lets directors keep track of board members, up 1.7% to $3.57.
Transport and logistics firm Mainfreight fell 1.2% to $9.75 and courier and data management company Freightways declined 1.3% to $3.70 after Transport Minister Gerry Brownlee announced a rejig in the way government licenses vehicles.
From August, the road user charge will rise 4.1% and petrol excise will increase two cents per litre in a restructuring that will ditch some licensing fees.
Trade Me dropped 2.1% to $3.76 after its controlling shareholder, Fairfax Media, issued a profit warning as tepid sales look set to shave 18% from its annual earnings.
The Australian media group is set to post annual earnings before interest, tax, depreciation and amortisation of $A500 million, its weakest underlying result since 2008.
Warehouse, the biggest listed retailer, was unchanged at $2.55 after government figures showed consumer spending on credit and debit cards rose for a second time last month.
Other retailers were mixed, with jewellery chain Michael Hill International down 2% to $1, while children's clothing seller Pumpkin Patch gained 1.1% to 92 cents.
Argosy Property was unchanged at 86 cents after it said it renewed a number of leases since its earnings result, taking its lease expiry profile for the year ending March 2013 to 11% from 18%.
Rival Goodman Property Trust slipped 0.4% to 99.5 cents after it sold a standalone warehouse in Mangere for $8.1 million, a 3.8% premium.