MARKET CLOSE: Shares extend fall on OCR disappointment; Meridian, Genesis drop

New Zealand shares extended their fall from a record, led by Meridian Energy, as investors remained disappointed by yesterday's smaller interest rate cut than expected. Genesis Energy and Fletcher Building declined.

The S&P/NZX 50 Index fell 7.12 points, or 0.1%, to 5894.18. Within the index, 24 stocks fell, 22 rose and four were unchanged. Turnover was $90.2 million.

Investors sold equities for a second day after the Reserve Bank yesterday cut the official cash rate to 3%. The benchmark index rose to a record in the lead-up to the decision on an expectation Reserve Bank governor Graeme Wheeler would be more aggressive in reducing interest rates.

Stocks held for their steady dividends fell. Meridian dropped 2.3% to $2.13. Genesis declined 1.1% to $1.76. Mighty River Power fell 0.4% to $2.79. DNZ Property Fund slipped 0.2% to $2.155. Fletcher Building fell 0.3% to $8.05.

"The market rallied going into the Reserve Bank meeting on the expectation that rates would get cut and then it was a case of they'd already moved, so you've seen a little bit of disappointment afterwards," said Mark Lister, head of private wealth research at Craigs Investment Partners. "It's a combination of two things – people probably had expectations of more, and they were disappointed and the market rallied going into the result."

Orion Health Group, the health management software firm, was the best performer on the day climbing 2.8% to $3.99. Pacific Edge, the bladder cancer test developer, rose 1.6% to 63c.

Trade Me Group, the online auction site, rose 1.5% to $3.46. It corrected an Australian media report today, saying it wasn't participating in any process to buy Fisher & Paykel Finance.

Kathmandu Holdings rose 0.6% to $1.76. Briscoe Group, the retailer controlled by managing director Rod Duke, is offering Kathmandu shareholders a mixture of cash and scrip which equates to a 4c premium on the outdoor equipment retailer's last trading price. Briscoe was unchanged at $2.80.

A2 Milk advanced 1.3 percent to 81c.

Chorus fell 0.9% to $2.815. Australian fund manager L1 Capital has cashed up part of its stake in the local telecommunications network operator, booking a 34% over the past year.

Outside the benchmark index, Comvita rose to a fresh record for the second consecutive day up 2% to $5.10. The Te Puke-based maker of health products based on manuka honey told its annual shareholders' meeting is expected a 35% gain in annual earnings, up from annual profit of $10.2 million in the year ended March 31.

(BusinessDesk)