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MARKET CLOSE: NZ shares fall on China, Greece fears; Kathmandu, Warehouse, Restaurant Brands drop

 S&P/NZX 50 Index fell 30.25 points, or 0.5%, to 5737.45.

Sue Metherell
Thu, 09 Jul 2015

New Zealand shares fell as global uncertainty over China's financial markets and Greece's debt crisis spooked investors.

Kathmandu Holdings, Warehouse Group and Restaurant Brands declined in a broad-based selloff.

The S&P/NZX 50 Index fell 30.25 points, or 0.5%, to 5737.45, recovering from a 1.4% intraday drop. Within the index, 35 stocks fell, nine rose and six were unchanged. Turnover was $206 million.

The benchmark index climbed out of its morning slump after Asian markets opened better than expected. International markets have been spooked by a sharp correction on China's stock exchange, with the Shanghai SE Composite Index slumping a third over the past month, triggering selloffs across the region as traders fret over signs of weakness in the world's second largest economy. The turnaround in Chinese equity markets ended a more than 150 point surge in the past 12 months.

"This morning volumes were very light and it actually felt as though there was a little panic selling from retail investors in the market – it was get-me-out-type selling as opposed to anything else," Matthew Goodson, managing director of Salt Funds Management said. "All markets rebounded early-mid afternoon when Asian markets opened a little better. The Shanghai market is still up 70-80% over the past 12 months."

Kathmandu, the outdoor goods retailer facing a takeover by Brisoe Group, led the benchmark index lower, down 4.3% to $1.56. Warehouse, the discount retailer, fell 2.6% to $2.65. Restaurant Brands, the country's largest fast-food operator, declined 2.6% to $4.15. SkyCity Entertainment Group, the casino operator, dropped 1.9% to $4.20. Briscoe, which is outside the benchmark, fell 0.4% to $2.74.

On top of concerns about China's slowing economy, Mr Goodson said investors were still worried about the unfolding Greece debt crisis.

“There is not a hope in Hades that Greece can pay its debt back, there is no mechanism to kick a country out of the EU but it can be removed from the euro [currency],” Mr Goodson said. “If you remove one country from the euro, that's a very dangerous thing as that will lead to questions of who is next?"

Fletcher Building, the construction and building supplies firm, rose 0.8% to $7.94, recovering from an intraday drop to a two-and-a-half-year low of $7.72. Spark New Zealand, formerly Telecom Corp, fell 0.2% to $2.785.

Nuplex Industries, the specialty chemicals maker, dropped 1.5% to $4.06. Orion Health Group, the health management software developer, declined 1.7% to $3.98.

Pacific Edge, the biotech firm, was the best performer on the benchmark index up 3.1% to 66c.

Outside the benchmark index, Mercer Group was unchanged at 10c after saying annual earnings fell as much as 40% due to missing sales targets for its Titan 500 Slicers.

(BusinessDesk)

Sue Metherell
Thu, 09 Jul 2015
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MARKET CLOSE: NZ shares fall on China, Greece fears; Kathmandu, Warehouse, Restaurant Brands drop
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