Market close: shares fall, Nuplex hurt by Aussie downturn

New Zealand shares fell, with Nuplex Industries cutting its full-year earnings guidance a second time and Summerset Group modestly weaker after its biggest shareholder reduced its stake in a discounted sale.

The NZX 50 Index declined 38.186 points, or 0.8 percent, to 4597.84. Within the index, 18 stocks fell, 17 rose and 15 were unchanged. Turnover of $247 million included Quadrant Private Equity's sale of 14 percent of Summerset Group for about $89 million.

Nuplex tumbled 7.4 percent to $3 after it cut the range for its full-year earnings guidance by about $11 million, saying Australia's manufacturing slump has dented demand for its resins, specialty chemicals and plastic additive products. It also struggled against the strong kiwi dollar and weak demand in Europe.

"The Australian economy is under pressure and we're seeing that in interest rate cuts flowing through," says James Lindsay, equities manager at Tyndall Investment Management.

Australia's Performance of Manufacturing Index for April sank deeper into contraction to 36.7 on a scale where 50 divides growth from shrinkage, the lowest result since May 2009.

Fletcher Building, which sells building supplies and pipes in Australia, fell 2.8 percent to $8.44.

Summerset declined 0.3 percent to $2.99 after Quadrant sold shares at $2.90 to New Zealand and Australian investors via First NZ Capital. Quadrant retains about 23 percent.

"There's been good demand for good businesses," Mr Lindsay says.

Telecom dropped 3.9 percent to $2.45 and Chorus, the network company spun off from Telecom in 2011, dropped 2.2 percent to $2.69.

Heartland New Zealand fell 3.8 percent to 77 cents after Standard & Poor's put the lender's BBB- credit rating on a negative outlook, along with seven other banks, over the increased risk of a national property bubble bursting and putting stress on the country's financial system.

Warehouse Group rose 1 percent to $4.14 and children's clothing chain Pumpkin Patch gained 2.7 percent to $1.14 after an ANZ-Roy Morgan poll showed consumer confidence continued improving this month, as rising house prices and a better jobs market made people more optimistic.

Mighty River Power fell 1.2 percent to $2.53, ending its first full week on the bourse. The government announced Meridian Energy would follow MRP in the partial privatisation programme once its annual results are independently audited and filed.

Guinness Peat Group was unchanged at 52 cents after the sale of its investment in ASX-listed Peet was crystallised by CIC Australia declaring its takeover unconditional.

That leaves local insurer Tower as the last asset to be sold as GPG prepares to rebrand as its UK-threadmaker Coats subsidiary. Shares in Tower sank 4.8 percent to $1.78.

(BusinessDesk)