MARKET CLOSE: NZ shares fall for first time since Brexit

New Zealand shares fell from a record high, led by Trade Me Group and Orion Health Group, as investors await the earnings season for evidence that high valuations are being driven by anything more than the absence of attractive alternatives to dividend yields.

The S&P/NZX 50 Index fell 6.92 points, or 0.1%, to 7,310.390, having gained about 16% this year. Within the index 27 stocks fell, 18 rose and six were unchanged. Turnover was $137 million.

It's the first time the market has fallen since June 24 when the result of the British referendum on the European Union became clear. It closed at 6,667.78 on June 24 and has seen a rise of just under 8.8% in a little over a month to a peak of 7,317.3 on July 25.

Trade Me, the auction website, fell 2.8% to $5.24. Orion declined 2.1% to $4.75. The stocks have gained 26% and 48% respectively this year, two of the three biggest gainers on the index. Fletcher Building, which has gained 28% this year, was unchanged at $9.40 yesterday. With little corporate news ahead of earnings season, and little in the way of profit warnings to change expectations, equity investors are keeping an eye on central bank activity, especially the outcome of the US Federal Reserve's latest meeting this week.

"This week is very much wait and see," said Greg Smith, head of research at Fat Prophets. "But when you boil it down, equities are pretty appealing when you look at the alternatives."

Mr Smith said the lack of profit warnings in the run up to earnings season next month means, "there's a belief that earnings season is going to be a pretty decent one. Expectations aren't massively positive so there's room for some positive surprises."

Comvita, the manuka honey products company, fell 1.9% to $10.35 and A2 Milk fell 1.5% to $1.96.

Fisher & Paykel Healthcare, which gets more than half its revenue in US dollars, fell 1.4% to $10.50 as the kiwi dollar gained late in the day.

Vital Healthcare Property Trust declined 1.8% to $2.23 and Heartland bank fell 1.5% to $1.33.

Air New Zealand was the biggest gainer on the index, rising 1.2% to $2.175. Z Energy rose 1.1% to $8.61.

(BusinessDesk)

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