MARKET CLOSE: Shares fall as offshore jitters linger; Trade Me, Pacific Edge drop

New Zealand shares fell as offshore ructions kept investors cautious and reluctant to take positions in the market. Trade Me Group, Pacific Edge and Orion Health Group declined.

The S&P/NZX 50 Index decreased 12.1 points, or 0.2%, to 5725.34. Within the index, 22 stocks fell, 19 rose and nine were unchanged. Turnover was $130 million.

Investors in global markets are slowly recovering their confidence after the uncertainty surrounding Greece and its debt crisis and a sharp correction on Chinese stock exchanges saw widespread selling of risk-sensitive assets in recent weeks. Chinese policymakers have since introduced measures to prop up the market, helping the Shanghai SE Composite Index rise 4.3% in afternoon trading. Traders are now eyeing up how Greece's Sunday deadline with its European creditors will turn out.

Traders still have concerns about the volatility in the market, with the Chicago Board Options Exchange's Volatility Index, known as Wall Street's 'fear gauge' near a five-month high, and local stocks fell in today's trading. Trade Me, the online auction site, led the benchmark index lower, down 2.1% to $3.29. Orion, the health management software developer, declined 1.8% to $3.91. Pacific Edge, the biotech firm, fell 1.5% to 65c.

"All of those risks are lingering in the background," said Mark Lister, head of private wealth research at Craigs Investment Partners. "You've got Greece hanging around. No one really knows if you'll get a resolution there, or whether we won't. We've also got China, which is up today but it could be down by just as much the next day they trade."

Utility companies fell as investors wait for a decision on whether the Tiwai Point aluminium smelter, which uses a seventh of the country's energy, will remain open. The deadline was due at the start of July but extended for another month. Contact Energy fell 1.4% to $4.91. Meridian Energy declined 1.2% to $2.14. Genesis Energy slipped 0.6% to $1.70. MightyRiverPower rose 1.3% to $2.835.

"That's really just been pushed out to August, so the market is going to remain a little cautious going into that date," Mr Lister said.

SkyCity Entertainment Group, the casino operator building Auckland's convention centre, fell 0.2% to $4.19. It announced the convention centre doesn't require a public consultation, effectively speeding up the resource consent process.

Spark New Zealand, formerly Telecom Corp, was unchanged at $2.785. Fletcher Building, the country's biggest construction company, fell 1.1% to $7.85. Auckland International Airport, the nation's busiest gateway, declined 0.8% to $5.16.

Kathmandu Holdings, which is facing a takeover by Briscoe Group, led gainers on the day, rising 3.9% to $1.62. Briscoe, which is outside the benchmark index, fell 1.5% to $2.70.

(BusinessDesk)