Market close: shares extend drop from two-month high - Chorus, Auckland Airport fall

New Zealand shares extended their decline from a two-month high, paced by network company Chorus, Auckland International Airport and Fletcher Building, as investors mulled the potential for mixed results in the looming earnings season.

The NZX 50 Index fell 15.585 points, or 0.3 percent, to 4563.385. Within the index, 25 stocks fell, 15 rose and 10 were unchanged. Turnover was a lower-than-average $81.8 million, with some local market participants taking a break during school holidays.

Chorus, which was spun off from Telecom in 2011, fell 2.2 percent to $2.70, bringing its decline this year to about 8 percent. The shares are rated a 'hold' based on a Reuters poll.

Auckland Airport fell 1.3 percent to $3.07 and Fletcher Building declined 0.6 percent to$8.47.

"It will be a good, solid earnings season although there will be some winners and losers," says Mark Lister, head of private wealth research at Craigs Investment Partners.

Companies such as Fletcher that are exposed to the Australian economy and the weak Australian dollar against the kiwi may show some weakness, "given there are a few cracks appearing in Australia in the short-term".

Fisher & Paykel Healthcare fell 1.7 percent to $3.52 and Port of Tauranga declined 2.1 percent to $14.50. Metlifecare, the retirement village operator, fell 2.7 percent to $3.25.

Mr Lister says the New Zealand market is "slightly expensive" though to say it is over-valued is "too strong a term".

Given interest rates are still low, and the economy is getting a lift from the Christchurch rebuild, a weaker kiwi against the greenback help exporters and a strong Auckland housing market, "any pull back in stocks people will see as a buying opportunity".

Retailers were mixed after figures showed consumer confidence slipped from a three-year high this month as rising petrol prices and the threat of looming interest rate hikes weighed in household optimism.

Warehouse Group, the biggest listed retailer, climbed 2.1 percent to $3.95, outdoor equipment chain Kathmandu gained 0.4 percent to $4.88 and clothing group Hallenstein Glasson advanced 0.4 percent to $2.64.

Jewellery group Michael Hill International fell 0.8 percent to $1.27 and online auction site Trade Me slipped 0.6 percent to $4.75. Children's clothing retailer Pumpkin Patch was unchanged at 89 cents.

Summerset Group was the same at $3.03 after the retirement village operator and developer began trading on a secondary listing on the ASX. It was also unchanged in afternoon trading in Australia at $A2.62.

Xero led gainers, rising 5 percent to $16.38 after telling NZX regulators this weak it was not sitting on any market moving information that would explain its recent tumble. Diligent Board Member Services, which gave the same answer over a query on its recent dip, rose 4.6 percent to $$6.38.

Tourism Holdings was unchanged at 60 cents after the rental campervan operator said it will fill any gaps left by the receivership of rival Pacific Horizon.

The Auckland-based firm has contacted Pacific Horizon's receivers to say it will offer an equivalent product to any customers affected by the firm's failure, but ruled out buying or leasing any of the 250-strong fleet.

Mighty River Power fell 0.4 percent to $2.40 after the stock exchange supervisor turned down the state-controlled power company's bid to keep its auditor for a sixth year.

Stock exchange rules mean a company has to switch auditor every five years to retain independence, and MRP unsuccessfully sought a waiver to keep its auditor for a sixth year.

Heartland New Zealand fell 1.2 percent to 86 cents after the country's newest bank said shareholders will get an offer from recidivist low-ball offer-maker John Armour, via Washington Securities.

NZX fell 0.7 percent to $1.34 ahead of its latest listing tomorrow when spy software maker Wynyard Group joins the bourse. The stock exchange has seen a flood of listings this year after a moribund period when companies shied away from going public.

Search engine maker SLI Systems, the most recent addition to the NZX, gained 3.6 percent to $2.38.

(BusinessDesk)