MARKET CLOSE: NZ shares fall from record high

New Zealand shares fell yesterday from a record led by Fletcher Building and Spark New Zealand ahead of their results this week. Summerset Group rose to an all-time high.

The S&P/NZX 50 index dropped 77.68 points, or 1.1%, to 7310.67, snapping three days of gains. Within the index, 34 stocks declined, 12 gained, and five were unchanged. Turnover was $172 million.

Fletcher Building fell 2.4% to $9.69 ahead of tomorrow's annual result, which Forsyth Barr estimates will show a 0.8% increase in profit to $402 million on a 3.7% gain in revenue to $8.98 billion.

"There's certainly a degree of profit taking on Fletcher ahead of its result," said James Smalley, a director at Hamilton Hindin Greene in Christchurch. "People are being a little bit conservative locking in some gains while they wait and see what happens in the results, then looking to reallocate after earnings are over."

Spark led the benchmark index lower, falling 2.6% to $3.72. The country's biggest telecommunications company today came out opposing a proposed tie-up between rival Vodafone New Zealand and pay-TV operator Sky Network Television, ahead of an earnings announcement on Thursday. Sky TV which reports next week, declined 0.6% to $4.84.

"It's no surprise it opposes a major competitor getting into bed with Sky TV – it's almost a given," Mr Smalley said.

Power companies dropped. Meridian Energy fell 2.3% to $2.80, Contact Energy declined 2.1% to $5.16 and Mercury Energy decreased 1.8% to $3.01, while Auckland International Airport dropped 1.1% to $7.06 and SkyCity Entertainment Group was down 1% to $4.92.

NZX gained 1% to $1.04 and Nuplex Industries was unchanged at $5.33.They will report today.

Fisher & Paykel Healthcare fell 1.3% to $10.61 after the medical devices maker filed a patent infringement notice in the US against rival ResMed.

Mr Smalley said investors are still chasing dividend yields, highlighted by results from Heartland Bank and Opus International Consultants. Heartland gained 0.7% to $1.44 after raising its dividend on an increased profit, whereas Opus International sank 9.5% to $1.05 after slashing its return to shareholders on a slump in earnings.

Summerset Group posted the biggest gain of the day, up 2.7% to $5.43, adding to yesterday's 4.8% increase on better than expected earnings. Rival Metlifecare gained 1.2% to $5.90.

(BusinessDesk)