MARKET CLOSE: Shares join global stocks lower led by Pacific Edge, Xero
New Zealand stocks joined a global sell-off amid concerns high-growth companies may struggle to convert sales into profits, led lower by biotech firm Pacific Edge and software developer Xero.
The NZX 50 Index fell 24.058 points, or 0.5 percent, to 5091.431. Within the index, 28 stocks fell, 11 rose and 11 were unchanged. Turnover was $101.8 million.
Stocks across Asia followed Wall Street lower, with Japan's Nikkei 225 index down 2.5 percent in afternoon trading, Australia's S&P/ASX 200 falling 0.9 percent and Hong Kong's Hang Seng down 0.8 percent. The sell-off followed the biggest daily decline on the tech-heavy Nasdaq Composite Index since November 2011. In the past month global investors have been selling stocks in growth-orientated tech firms, preferring stocks with higher yields instead.
Pacific Edge was the biggest decliner on the local market, falling 9.8 percent to $1.10. The Dunedin-based bladder cancer text developer had an intraday decline of 15 percent to $1.04, the lowest since Oct. 23, and has dropped 25 percent in the past month.
Xero, the cloud-based accounting software maker, fell 5.3 percent to $31.35, while milk marketer A2 Milk slipped 3.5 percent to 84 cents.
"Dragging the index lower today are Pacific Edge, Xero, A2 Milk - so all the companies that don't make any money," said Bryon Burke, head of equities at Craigs Investment Partners. "Stocks that have moved higher today are high yield stocks, so New Zealand is reflecting what's happening in the rest of the world."
Outside the benchmark index tech stocks slid. Wynyard Group, the security software firm, declined 5.6 percent to $2.36, SLI Systems, the search engine developer, fell 7.3 percent to $1.90 and GeoOp, which makes small business task management apps, dropped 10 percent to $1.35.
Vital Healthcare Property Trust, which has a gross dividend yield of 6.4 percent, was the biggest gainer on the NZX50, up 0.8 percent to $1.295. Telecom, which has a gross dividend yield of 6.2 percent rose 0.4 percent to $2.61.
Fletcher Building, New Zealand's largest listed company, rose 0.6 percent to $9.70. Sky Network Television advanced 0.5 percent to $6.48.
Today was the last day investors could buy Genesis Energy shares before the government lists 49 percent of the state-owned energy provider and retailer on April 17. MightyRiverPower rose 0.2 percent to $2.16, Meridian Energy advanced 0.4 percent to $1.15 and Contact Energy slipped 0.4 percent to $5.31.
Shares in Chorus fell 2 percent to $1.73 after it sought leave to appeal a High Court judgment upholding the Commerce Commission's determination setting the regulated prices on the telecommunications network operator's copper lines. The company also suspended its dividend reinvestment plan today.
Auckland International Airport fell 0.3 percent to $3.92. Air New Zealand, the national carrier, declined 1 percent to $2.06. Casino operator SkyCity Entertainment Group slipped 0.3 percent to $3.96.