MARKET CLOSE: NZ shares fall as weak oil, Chinese exports weigh on market; MRP, Contact, Genesis drop

New Zealand shares fell, joining a global selloff, on concern declining oil prices and slowing Chinese exports signal weaker global growth. Mighty River Power, Contact Energy and Genesis Energy led the decline.

The S&P/NZX 50 Index slipped 29.43 points, or 0.5 percent, to 6035. Within the index, 28 stocks fell, 15 rose and seven were unchanged. Turnover was $189 million.

Oil prices slumped to their lowest levels since 2009 after the Organisation of the Petroleum Exporting Countries agreed to keep production high despite depressed demand, stoking concerns a global glut would increase.

In New York, the Standard & Poor's 500 Index fell 0.7 percent overnight, as oil companies tumbled. In Asia today, Hong Kong's Hang Seng dropped 1.7 percent and Japan's Nikkei 225 Index shed 1 percent in afternoon trading. Australia's S&P/ASX 200 Index fell 0.8 percent.

"Commodity prices and oil tend to reflect growth expectations, so having such weakness there is causing some people to question whether the global economy is quite as strong as they thought it was," said Mark Lister, head of private wealth research at Craigs Investment Partners. "There's general negative sentiment across markets everywhere at the moment, with very weak commodity prices across the board."

Energy companies led the index down today, with Mighty River Power dropping 3.6 percent to $2.72, Contact down 2.6 percent to $4.58 and Genesis down 2.5 percent to $1.92. Bad news from Contact yesterday has made people cautious about the rest of the sector, Lister said. The electricity generator and retailer said yesterday its operational performance for November was worse than expected, leading it to warn that full-year operating earnings are not expected to be much different from last year's.

China reported a fifth monthly drop in exports Tuesday, adding to concern about global growth.

"This is just another indicator that tells you the Chinese economy is slowing down," Lister said. "Domestic demand is lower than they would like and they're not selling as much offshore either. China has been an area of weakness all year, it's a big point of concern for investors. Commodity prices are partly linked to what's happening in China, it's all a bit of a jigsaw that's intertwined."

Vector was the biggest gainer today, up 2.3 percent to $3.17.

Synlait Milk rose 3.1 percent to $2.63. The South Island dairy company is forecasting a boost in underlying net profit for its first-half, which will be significantly above the $419,000 achieved in the same period in 2015 mainly due to a boom in sales of infant formula.

Vital Healthcare Property Trust rose 2.2 percent to $1.88."Vital is quite a safe, defensive property company, the sort of stock that's in vogue at the moment," Lister said.

Fisher & Paykel Healthcare rose 1.5 percent, and has gained 32 percent thss year.

"Fisher & Paykel is insulated from some of the economic weakness we're seeing, and they're an exporter so they're benefiting from the New Zealand dollar being a bit weaker today," Lister said.

(BusinessDesk)