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