Market close: NZ shares join global slide, led by Xero, Goodman Fielder

BUSINESSDESK: New Zealand shares joined a global side as markets focused on Europe’s debt crisis. The decline was paced by stocks as diverse as Xero, Goodman Fielder and SkyCity.

The NZX 50 Index fell 1.72 points, or 0.05%, to 3458.97. Within the index, 23 stocks fell, 16 rose and 11 were unchanged. Turnover was $83.8 million.

Officials from Greece’s troika of international creditors arriving in Athens have signalled little hope the indebted nation will meet commitments for its bailout, while Spain paid the second-highest yield on short-term debt since the euro started at auction.

The Nikkei 225 Index was down 1.6% in early afternoon trading in Tokyo amid concern global growth faces more headwinds.

"It's certainly not good news for New Zealand," said Grant Williamson, director at Hamilton Hindin Greene. "Although New Zealand is insular we still sell a lot of products which will not be in the same demand if the economic market continues to decline."

"The focus continues to be on Europe and the Spain issues." 

Xero fell 5.5% to $5.20, extending its decline from the record $5.80 it reached in intraday trading a week ago. The shares have soared 99% this year. The Wellington-based company holds its annual shareholders’ meeting tomorrow.

"It's one stock where there are large gainers for investors and in times of uncertainty investors will sell those stocks," Mr Williamson said.

Goodman Fielder, the food ingredients manufacturer whose brands include Edmonds baking products and Vogel’s bread, fell 3.2% to 61 cents. SkyCity slipped about 2% to 3.45.

Oceanagold, which operates the Macraes gold mine near Dunedin, fell 0.8% to $2.38 ahead of its half-year results tomorrow.

"A lot of it comes down to the operating costs," Mr Williamson said. "What are the margins on the ounce of gold they can produce?"

Fletcher Building, New Zealand's largest construction company, dropped 0.7% to $5.77.

Tower, the insurance company controlled by Guinness Peat Group, up 1.8% to $1.67. Telecom, the largest company on the exchange, rose 1.6% to $2.56.

Shares in contract labour company, AWF Group fell 0.4% to $2.52 after managing director Mike Huddleston told the annual shareholders’ meeting he expects a strong profit growth this year.

The shares have been trending higher from $1.78 at last year’s annual shareholders’ meeting.