MARKET CLOSE: NZ shares fall on weak global sentiment; Xero, Spark, A2 drop, Warehouse rises

New Zealand shares declined amid continued global concerns about economic growth and demand for commodities. Xero, Spark New Zealand and A2 Milk Co falling while Warehouse Group gained.

The S&P/NZX 50 Index dropped 51.8 points, or 0.9 percent, to 6,019.49. Within the index, 30 stocks fell, 16 rose and four were unchanged. Turnover was $172 million.

US equities continued to fall overnight as oil moved lower and European banks extended their slide. Local news was light on the eve of earnings season which begins tomorrow with SkyCity Entertainment Group's annual earnings report.

Xero led the index lower, dropping 3.9 percent to $14.51, a four-and-a-half month low, while fellow tech stock Orion Health Group fell 2.1 percent to $2.79.

"Stocks like Orion and Xero have US interests, and a core part of their valuation is their ability to grow into the future in offshore markets, and the valuation offshore markets put on stocks like that has been coming back," said Nick Dravitzki, equity analyst at Devon Funds Management. "The Nasdaq's back significantly in the past couple of weeks, and that's reflected in these prices."

Spark New Zealand fell 3.8 percent to $3.26. The telecommunications retailer has gained 2.7 percent so far this year, outpacing the NZX 50 Index which has fallen 4 percent in that time.

"Spark is the largest capitalised Asian stock on the market, it's one of the more liquid stocks on the market and it has a reasonable proportion of offshore ownership on its register," Dravitzki said. "There's concerns out there, and in that kind of environment you get material selling. A lot of offshore investors have been selling broadly - just taking risk away."

Dual-listed A2 Milk Co dropped 3.8 percent to $1.77, with Westpac Banking Corp down 2.3 percent to $30.23 and Australia & New Zealand Banking Group shedding 1.8 percent to $24. Australia's S&P/ASX 200 was down 1.4 percent at 5:30 New Zealand time, reflecting the Australian's market increased exposure to oil and energy concerns.

Heartland Bank fell 3.5 percent to $1.11, Z Energy lost 2.7 percent to $6.18, and Metro Performance Glass dropped 2.5 percent to $1.57.

Meridian Energy shed 2.1 percent to $2.30.

The top performer today was Warehouse Group, up 1.5 percent to $2.70. Vector rose 1.3 percent to $3.20, and Auckland International Airport advanced 1.3 percent to $5.65.

SkyCity Entertainment Group rose 0.9 percent to $4.44, while Vital Healthcare Property Trust grew 0.8 percent to $1.89.

Outside the benchmark index, Wynyard Group fell 1.4 percent to $1.38, a three-month low.

The company, whose shareholders will vote next week on giving the board more freedom to issue shares, has signed a $2.8 million deal to provide its intelligence software services to a state policing agency. The three-year contract is Wynyard's first in the country, which wasn't identified, providing the Auckland-based firm's advanced crime analytics software, it said in a statement.

(BusinessDesk)