Market close: shares fall - Mainfreight, Diligent decline

New Zealand shares fell on concern prices have run up ahead of earnings and profit downgrades in Australia weighed on companies with businesses across the Tasman, including Mainfreight, Australia & New Zealand Banking Group, Westpac Banking Corp and AMP.

The NZX 50 Index fell 7.816 points, or 0.2 percent, to 4590.839. Within the index, 25 stocks fell, 15 rose and 10 were unchanged. Turnover was $175 million.

Mainfreight, the transport group, fell about 2 percent to $9.85 as Australian firms including Transfield and WorleyParsons lowered their guidance, stoking concern about tepid growth in Australia.

ANZ Bank fell about 3 percent to $35.50 on the NZX, while Westpac slipped 1.1 percent to $37.76 and AMP dropped 1.5 percent to $6.62.

"It still seems like there's a tough environment in Australia for doing business, with the economy slowing down to more normal rates", says Shane Solly, portfolio manager at Mint Asset Management. The earnings downgrades "have been a shot across the bows".

The NZX 50 has retreated from the record high levels it charted last week and some of the start performers have eased back from their highs.

Cloud-based accounting software firm Xero fell 0.5 percent to $13.80 and Diligent Board member Services declined 1.3 percent to $7.50. Retirement village operator Metlifecare fell 1.7 percent to $3.42 and rival Summerset Group slipped 0.7 percent to $3.05.

"Pricing multiples have got ahead of earnings growth in the near term," Mr Solly says. "The market is pushing valuations quite hard."

Property for Industry fell 1.8 percent to $1.34, leading declines in some property investors. Precinct Properties New Zealand fell 1.4 percent to $1.10 and DNZ Property Trust was down 1.2 percent to $1.71. Kiwi Income Property Trust declined 0.4 percent to $1.185 and Goodman Property Trust shed 0.4 percent to $1.14.

Fonterra Shareholders' Fund rose 0.8 percent to $8.09, a record close. Mr Solly says its gains reflect a global search for companies with some degree of certainty, and Fonterra fits the bill with growing demand for its products.

Mighty River Power rose 1.2 percent to $2.52, lifting 2 cents above its IPO price.

Fisher & Paykel Healthcare, which is due to post earnings this week, ended the day down 0.7 percent to $3.01, having touched a two-year high in intraday trading. The company has forecast a 17 percent gain in earnings.

Sealegs, the maker of amphibious boats, rose 11 percent to 15 cents after reporting a return to profit driven by increased prices for its products.

(BusinessDesk)