MARKET CLOSE: Shares dip, paced by Air NZ; ANZ, Westpac decline

New Zealand shares edged lower, paced by Air New Zealand as investors booked in recent gains in a fully priced market. Dual-listed Australian banks, Westpac Banking Corp and Australia and New Zealand Banking Group declined on the prospect of new regulation across the Tasman. Evolve Education Group advanced on its NZX debut.

The NZX 50 Index decreased 0.773 points, or 0.01 percent, to 5521.909. Within the index, 21 stocks fell, 22 rose and seven were unchanged. Turnover was $153.1 million. 

Air NZ declined 2.5 percent to $2.39 as investors look to crystallise the national carrier's 18 percent gain over the past month as the stock was bolstered on the prospect of falling oil prices feeding through to cheaper jet fuel.

"Air New Zealand has come off the boil," said Shane Solly, director at Harbour Asset Management. "There is a little bit of awareness that there's been a near term gain from lower oil prices and whether that's a long term gain. Certainly it's been a tailwind, but people wonder whether it's sustainable."

Across the Tasman a report into Australia's finance sector is set to be released over the weekend, causing market speculation it may call for an increase in the amount of equity lenders need to hold. The dual listed banks dropped. Westpac fell 2.1 percent to $32.25 while ANZ declined 1.3 percent to $34.20. 

In Australia "there is some big news over the weekend which will be the announcement about the capital structure and capital requirement for banks so that's weighing on the minds of the Australian investment community," Solly said.

Outside the benchmark index, Evolve, the childcare business, climbed 8 percent to $1.08 on its NZX debut after its initial public offer raised $132.3 million in new capital to fund its acquisitions in early childhood education.

"One thing you can say about the New Zealand market at the moment is it is getting a wide number of really different businesses to invest in," Solly said.

F&P Healthcare gained 0.2 percent to a record $5.93. The breathing apparatus manufacturer, which exports over 90 percent of its products overseas, benefits from a falling New Zealand dollar, which has dropped some 7 US cents to 77.76 cents from its near post-float highs in July of 88.35.

"There is certainly a renewed focus on the US dollar strength," Solly said. "That company continues to do the right thing operationally from a growth aspect and looks attractive as it is. The dollar coming back, and the potential for a further fall against the US is supportive."

A2 Milk Co, the milk marketer, led the benchmark index lower falling 4.8 percent to 60 cents. Pacific Edge, the Dunedin-based biotech firm, dropped 4.5 percent to 85 cents. 

Tower, the general insurer, was the best performer on the benchmark index, gaining 1.7 percent to $2.085.

Spark New Zealand, formerly Telecom Corp, declined 1 percent to $2.91. Chorus, the telecommunications network operator, slipped 0.4 percent to $2.65. Fletcher Building, the construction and building supplies company, rose 1.2 percent to $8.50.

(BusinessDesk)