Market close: shares fall as Labour-Greens power plan rattles sector

New Zealand shares fell as investors assessed the potential threat to power company earnings from a Labour Party-Green Party plan to overhaul the electricity sector if elected.

Contact Energy, TrustPower, Infratil and Vector all declined.

The NZX 50 Index fell 36.16 points, or 0.8 percent, to 4442.10. Within the index, 38 stocks fell, nine rose and three were unchanged. Turnover was $127 million.

Contact, the biggest power company on the exchange, tumbled 4.6 percent to $5.46. TrustPower declined 3.1 percent to $7.56 while its 50.7 percent owner, Infratil, fell 2.3 percent to $2.33. Lines company Vector dropped 2.4 percent to $2.88.

The plan announced by the two main opposition parties would see a return to a centrally planned electricity system, a single state-owned power buyer and the breakup of integrated generator-retailers – changes they say could wipe as much as $700 million from power company revenues.

"The impact of this is potentially larger than, say, the Tiwai Point closure," says William Curtayne, an analyst at Milford Asset Management. "If this went through it could lead to some pretty significant downgrades for these companies."

Offshore investors, eyeing the looming sale of Mighty River Power, "will be wondering what's going on with politics here".

OceanaGold, the operator of the Macraes gold field, 9.5 percent to $2.09, the lowest in more than four years and extending its slump in the past three months to 34 percent. Spot gold is trading near its lowest levels in more than two years.

New Zealand Oil & Gas fell 4.7 percent to 82 cents as the price of crude oil fell, part of a broader decline in commodity prices amid concern global growth may be faltering.

Summerset Group was the biggest gainer, rising 2.1 percent to $2.98 as investors were lured to the certainty of earnings growth in the retirement sector. Rival Ryman Healthcare held unchanged at $5.52, a record high. Metlifecare gained 0.3 percent to $3.22.

Telecom gained 1.2 percent to $2.485 and Chorus, the network company spun off in 2011, rose 2.6 percent to $2.65. Fletcher Building fell 0.5 percent to $8.44.

Nuplex Industries slid 4 percent to $3.09. Port of Tauranga, the nation's busiest export port, rose 0.7 percent to $15.35, a record close.

Fisher & Paykel Healthcare, which gets more than 50 percent of its sales in US dollars, rose 1.2 percent to $2.59.

(BusinessDesk)