MARKET CLOSE: NZ shares fall after Paris terror attacks; NZ Refining, Xero decline

New Zealand shares fell along with equity markets across Asia as the terror attacks in Paris sapped risk appetite among investors, weighing on risk-sensitive assets such as technology and commodity-linked companies. New Zealand Refining and Xero declined.

The S&P/NZX 50 Index slipped 27.35 points, or 0.5 percent, to 5961.68. Within the index, 30 stocks fell, 11 rose and nine were unchanged. Turnover was $93.4 million.

Stocks fell across Asia after the attacks in Paris over the weekend sent investors in search of defensive stocks and safe haven assets such as the yen and gold. China's Shanghai Composite Index fell 0.5 percent in afternoon trading, while Japan's Nikkei 225 Index was down 1 percent and Australia's S&P/ASX 200 index declined 0.6 percent.

"Markets around the globe had a weak finish last week anyway, but events over the weekend haven't provided any reason for them to re-rate upwards," said Rickey Ward, NZ equities manager at JBWere. "Our market has followed on from that weak undertone from last week and the events in Paris clearly haven't helped."

New Zealand Refining led the index lower, falling 3.9 percent to $3.72, and snapping gains last week when investors were optimistic about its margins.

"Commodity-related stocks are coming under pressure because this could impact global oil depending on how it eventuates, so I'd imagine that is a direct response to the weekend's events," Ward said.

Service station chain Z Energy fell 0.9 percent to $6.55, while national carrier Air New Zealand dropped 2.8 percent to $2.74

Xero fell 3.8 percent to $18.80. The cloud-based accounting software developer has risen 18 percent in the past month. Diligent Corp, the governance app developer, declined 1 percent to $5.94.

"In this environment when uncertainty starts to grow, and that's what the weekend's events do, growth companies tend to come under the most pressure because they're priced on extreme multiples on future expectations," Ward said.

Argosy Property fell 0.9 percent to $1.125. The property investor lifted first-half earnings 6.2 percent as a lack of space in Auckland's office market drove growth in the company's rental income.

A2 Milk was the biggest gainer on the benchmark index, rising 3.4 percent to 91 cents, on speculation Australian and Chinese demand for infant formula will remain strong.

Units in the Fonterra Shareholders' Fund advanced 2.4 percent to $5.52, after Fonterra Cooperative Group raised its annual earnings forecast, cutting costs to boost margins even as milk volumes decline. The fund entitles investors to Fonterra's dividend stream, which is derived from the cooperative's earnings.

"Today is probably further indication that the strategy they're going with - right-sizing the business to allow it to become more efficient and competitive - is in the early stages paying dividends," Ward said. "But there's a long way to go between now and the end of their financial year in July."

Ebos Group rose 0.2 percent to $13.67. The animal and healthcare products company will expand its reach in the natural health products sector after agreeing to buy New Zealand vitamin and herbal tea maker Red Seal for $80 million.

Wynyard Group fell 1.14 percent to $1.73. The security software firm has signed a $900,000 contract with an unidentified Saudi bank to help the institution comply with regulation from Saudi Arabia's central bank, the Saudi Arabian Monetary Agency. Separately, it announced a $3.2 million deal with Telstra for its Advanced Cyber Threat Analytics, a cyber threat protection program.

Wellington Drive Technologies was unchanged at 6 cents after the unprofitable maker of energy-efficient motors narrowed its third-quarter loss, having lifted sales in Latin America and Asia and benefitted from a weaker kiwi dollar.

(BusinessDesk)