BUSINESSDESK: New Zealand shares fell, nudging the NZX 50 Index from the highest in more than four years on bets stocks have risen enough to account for any extra stimulus the Federal Reserve should announce this week.
Tower and PGG Wrightson dropped.
The NZX 50 Index fell 3.67 points, or 0.1%, to 3786.04. Within the index, 17 stocks rose, 22 fell and 39 were unchanged. Turnover was $105 million.
Investors are betting the Fed will announce a third round of asset purchases as well as extend a pledge to keep interest rates at record low levels.
Reserve Bank governor Alan Bollard kept New Zealand's target rate unchanged today, citing weak growth in trading partner nations and a high kiwi, which is hurting manufacturers.
"The New Zealand markets has had a good run up until today on expectations of improving stimulus from the world's central banks," says Shane Solly, portfolio manager at Mint Asset Management.
"The markets have factored in some level of quantitative easing. If it comes out in a weaker form markets will be softer."
Tower fell 2.7% to $1.80. Chairman Bill Falconer, who was due to retire in February, has stepped down as the insurer considers proposals from other parties after a strategic review aimed at lifting the value of the company.
PGG Wrightson, New Zealand's largest agricultural firm and majority owned by Chinese investor Agria, fell 2.6% to 37 cents.
"PGG is one of the ones that is being talked about for the next merger and acquisitions story," Mr Solly says.
Fisher & Paykel Appliances continued its rally, gaining 1.3% to $1.18 in the wake of Haier's proposal to buy the 80% of the company it doesn't already own for $1.20 a share. F&P Appliance today hired Grant Samuel as independent adviser as it prepares its target company statement.
The company's F&P Finance unit may have its credit rating raised one notch to BB+ by Standard & Poor's because a takeover of parent Fisher & Paykel Appliances by China's Haier is likely to bolster its credit profile.
Vital Healthcare Property Trust shed 1.2% to $1.22. The Auckland-based company has brought the land and buildings of Sportsmed, a private hospital in Adelaide, for $A29.2 million.
Australian lender Westpac Banking Corp fell 0.8% to $30.40, while Australia New Zealand Banking Group shed 0.9% to $30.61.
The decline was led by OceanaGold, which operates the Macraes goldfield near Dunedin, down 3.4% to $3.38.
Warehouse, New Zealand's biggest listed retailer, climbed 1 percent to $2.90, while Kathmandu, the outdoor clothing and equipment chain, gained 1.1 percent to $1.78 ahead of its full-year results next week.
The gainers were led by Air New Zealand, the airline slated for government sell down, up 2.3 percent to $1.13.