Market close: shares fall on China jitters - Vital, Pumpkin Patch, AMP drop

New Zealand shares fell, pushing the NZX 50 Index to the lowest since early March, as fears of a Chinese credit crunch weighed on Asian equity markets. Vital Healthcare Property Trust fell after announcing a rights issue and Pumpkin Patch led some retailers lower.

The NZX 50 fell 47.052 points, or 1.1 percent to 4316.993. Within the index, 37 stocks fell, seven rose, and six were unchanged. Turnover was $135 million.

The Shanghai Exchange Composite Index fell 4.7 percent in afternoon trading, leading equity markets lower across Asia amid concern a credit squeeze in China will curb growth in the fastest-growing major economy.

"Markets are being driven by China on fears of a slowdown there," says Greg Easton, an adviser at Craigs Investment Partners. He cited CNN Money's Fear & Greed Index, which is at a reading of 11, meaning 'extreme fear' is the emotion driving equity markets.

Vital Healthcare tumbled 12 percent to $1.235 after the medical and healthcare property investor said it is planning a rights issue next month and has suspended its distribution reinvestment plan for the third-quarter. It did not give details of the issue.

"That's seen their price get punished," Mr Easton says. "The share price is way ahead of net tangible assets so a new share issue could be quite dilutionary."

AMP fell 3.8 percent to $5.10, extending its 9.4 percent drop yesterday, when it said first-half earnings may fall as much as 16 percent after its Australian wealth protection business struggled in the second quarter.

Pumpkin Patch, the children's clothing chain, declined 10 percent to 86 cents. Warehouse Group, the biggest retailer on the NZX 50, fell 5.6 percent to $3.40, jeweller Michael Hill International slid 2.3 percent to $1.28 and Hallenstein Glasson Holdings slipped 1.9 percent to $4.60.

Ebos Group fell 0.8 percent to $9.15 after trading in its renounceable rights ended today. The 7-for-20 pro-rata renounceable entitlement offer is helping it fund the $1.1 billion acquisition of the Symbion pharmaceutical wholesaler and distributer in Australia.

The rights were quoted at $2.93 and rose 0.4 percent to $2.65 today.

Diligent Board Member Services was unchanged at $6.95 after the governance software maker held its annual meeting. Chairman David Liptak told shareholders it will not pay a dividend this year, instead preferring to reinvest funds into the business and that it is considering listing in the US.

DNZ Property Fund was unchanged at $1.64 after the diversified property investor said it plans to ask shareholders to boost the pool for directors' fees 27 percent to $375,000.

The board's fees have not changed since it listed in 2010, over which time the stock has gained 66 percent and paid out 23.5 cents per share in total dividends.

Telecom fell 1.6 percent to $2.205, while Fletcher Building climbed 0.5 percent to $8.20.

Sky Network Television halted its slide, rising 2.8 percent to $5.10.

TrustPower fell 0.3 percent to $7.08 after it said yesterday its board will ask for a 6.8 percent bump in the fee pool. Cornerstone shareholder Infratil dropped 1.3 percent to $2.21.

Dual-listed Goodman Fielder rose 2.3 percent to 88 cents on the NZX after downgrading annual earnings on smaller poultry sales and higher marketing costs.

Earnings from continuing and discontinued operations before significant items will be $A195 million to $A200 million in the year ending June 30, compared to $A233 million last year.

(BusinessDesk)