MARKET CLOSE: NZ shares fall; ANZ, Westpac, A2 drop with ASX selloff; Trade Me gains

New Zealand shares fell, led by Australia & New Zealand Banking Group, Westpac Banking Corp and companies exposed to the Australian economy, as that nation's benchmark index sank to a month-low.

The S&P/NZX 50 Index dropped 12.98 points, or 0.2 percent, to 6040.57. Within the index, 22 shares rose, 21 fell and 7 were unchanged. Turnover was $173 million.

In Sydney, the S&P/ASX 200 Index fell 1.3 percent, extending its slide on concern weak oil prices signal softer demand in the global economy. The New Zealand market didn't react much to the Reserve Bank cutting its benchmark interest rate to 2.5 percent while signalling the end of its easing cycle.

ANZ Bank led the NZX 50's decline down, dropping 3.4 percent to $28, while Westpac fell 3.3 percent to $33.85.

"The banking sector in Australia has had a very weak day, and that sentiment's flowed through to our market, even though low interest rate environments are generally positive for income equities," said Peter McIntyre, investment adviser at Craigs Investment Partners. "Today's fall follows on from weaker markets across Asia."

A2 Milk, the milk marketer that counts Australia as its biggest market, fell 1.8 percent to $1.10. Ebos Group, the medical and pet consumables company that get most of its sales across the Tasman, fell 0.9 percent to $14.37. Among company that may be affected by weak sentiment for crude oil, which is near its lowest price in more than six years, New Zealand Refining dropped 2.4 percent to $3.70.

Energy stocks rose today, with Genesis Energy up 1.1 percent to $1.91 and Meridian Energy gaining 0.7 percent to $2.25.

"They're very interest rate sensitive stocks," McIntyre said. "The electricity sector pays such a solid income stream, and investors are looking for sustainable income growths and dividends to complement where we've gone with the cash rate."

Trade Me Group was the biggest gainer on the index, rising 1.7 percent to $4.17. Some investors are being attracted to the stock because it offers a relatively attractive yield at a time where low interest rates make term deposits less attractive.

"There's been really strong demand from TradeMe over the last three months because investors, whether they're retail or institutional investors, have seen the stock as being a value play based on where its share price has gone," McIntyre said. "They were probably oversold in $3.50 range and we've seen them drive back over that $4 mark."

Fonterra Shareholders' Fund rose 0.2 percent to $5.76 after Fonterra Cooperative Group kept its forecast farmgate milk price unchanged, saying it expected global dairy prices to lift in the first half of next year.

Outside the benchmark index, VMob Group jumped 12 percent to 37 cents, a six-week high, after the NZAX-listed mobile voucher developer posting a surge in sales, although revenue was offset by costs that more than doubled. It plans to raise more capital to continue its growth strategy.

(BusinessDesk)