BUSINESSDESK: New Zealand shares fell for a second day as investors wound down stakes in other companies to buy a flood of shares in steel products maker Steel & Tube after its Australian parent exited the firm, and as stocks across Asia fell amid fears of China's slowing economy.
The NZX 50 index fell 19.85 points, or 0.5%, to 3888.14. Within the index 27 stocks fell, 11 gained and 12 were unchanged. Turnover was $95.2 million.
The local market followed stocks across Asia down as investor nerves were rattled by continued fears about the strength of China's economy. Japan's Nikkei 225 index fell 1.8% in afternoon trading, Hong Kong's Hang Seng Index declined 0.2% and Australia's S&P/ASX 200 index decreased 0.3%.
The benchmark index fell as some investors sold out of other companies to take up $91.2 million of shares in Steel & Tube, after ASX-listed Arrium exited its 50.3% at a 15% discount to yesterday's closing price.
The shares fell 8.3% to $2.22, a 7.7% premium to Arrium's sale price. Accident Compensation Corp bought 6 million shares for $12.4 million, taking a 7.2% stake in Steel & Tube.
"What may have happened is funds liquidated holdings in other areas to take up a stake in Steel & Tube," says James Smalley, client adviser at Hamilton Hindin Greene.
The NZX 50 index was led lower by Skellerup, which fell 3.4% to $1.69 after shedding rights to its dividend, and fast food operator Restaurant Brands, which declined 2.1% to $2.33.
Fletcher Building, the biggest listed company, fell 1.9% to $7.16, and Telecom, the second-biggest, declined 1.5% to $2.33.
Power company Contact Energy was the biggest gainer on the day, up 1.7% to $5.36 after the Electricity Authority determined a new pricing regime for the national grid reflecting its benefit to generators and consumers. TrustPower fell 1.9% to $8.18.
Food ingredients-maker Goodman Fielder gained 1.5% to 67 cents and children's clothing chain Pumpkin Patch advanced 0.8% to $1.21.
Shares in NZX fell 0.9% to $1.14 after the stock exchange operator announced Fronde Systems Group's Mandy Simpson will join it as head of operations next month, and as the existing head of market services Simon Smith announced his resignation.
This article is tagged with the following keywords. Find out more about MyNBR Tags