MARKET CLOSE: Shares fall on China fears; Fonterra, Westpac, ANZ decline

New Zealand shares fell in a broad sell off as worries about China's economic growth spooked investors. Fonterra Shareholders' Fund, Westpac Banking Corp and Australia and New Zealand Banking Group declined.

The S&P/NZX 50 Index dropped 42.67 points, or 0.7%, to 5822.35. Within the index, 28 stocks fell, 11 rose and 11 were unchanged. Turnover was $154 million.

Stocks in Australia and New Zealand declined after China's central bank devalued the yuan following recent poor economic data, which will help exporters in Asia's largest economy. The move sent the kiwi dollar higher against the yuan, sapping returns for local exporters into China. Across the Tasman, the S&P/ASX 200 Index dropped 0.7% in afternoon trading as investors mulled the impact of a slowing Chinese growth will have on the region's economy.

Fonterra, whose units are entitled to the dividends from Fonterra's ordinary shares, fell 1% to $4.87. Westpac declined 2.1% to $35.90. ANZ dropped 1.7% to $33.81. Spark New Zealand, formerly Telecom Corp, retreated 2.4% to $2.84. Fletcher Building, the construction and building firm, slipped 0.1% to $7.80.

"The Chinese have devalued their currency, and obviously New Zealand and Australia have pretty big exposure to the Chinese market," said Grant Williamson, a director at Hamilton Hindin Greene. "They are a very large export market. Our currency and Australia's had been weakening nicely against most currencies and, of course, with the Chinese devaluing, that levels their currency both to ours and Australia, therefore our exports don't get so much value."

Fisher & Paykel Healthcare led the benchmark index lower, falling 3.6% to $7.41.

Summerset Group rose 2.2% to $4.22. New Zealand's third-largest listed retirement village operator more than doubled first-half profit to $35.7 million as it boosted sales after opening four new villages in the second half of 2014.

Diligent Corp fell 1.4% to $5.65. The governance software developer lifted first-half profit 11% to $US4.9 million as it generated stronger sales in the US in the second quarter and is picking faster revenue growth through the rest of the year.

Property For Industry fell 1.3% to $1.53. The industrial landlord more than doubled its first-half profit to $36.4 million on a valuation uplift for its portfolio and said it will tap investors for $49.5 million for acquisitions and developments.

Pacific Edge fell 1.6% to 62c. The maker of non-invasive bladder cancer tests won US regulatory approval to commercially process test samples from its latest cancer-detecting product at its Dunedin laboratory.

Outside the benchmark index the earning season continued, PGG Wrightson fell 2.2% to 45.5c. The rural services firm controlled by China's Agria Corp beat guidance, with an 18% gain in annual earnings to $69.5 million, led by an improved performance for seed and grain. It declared a lower final dividend after investing in businesses in Uruguay and Australia.

Mercer Group was unchanged at 10c. The company said it expects to turn to a loss of $7.8 million in 2015 and the stainless steel fabricator is considering selling its interiors and medical divisions to focus on its core business.

On the NZAX, VMob rose 8.8% to 37c. The mobile technology company is shifting its headquarters to San Francisco, planning to move from the NZAX to the main board of the NZX, and raising about $5 million in a private share placement.

(BusinessDesk)