MARKET CLOSE: Shares fall on global ructions, election jitters; Xero, Pacific Edge drop

New Zealand shares followed Asian markets lower as global ructions and Saturday's general election spooked investors. Pacific Edge led the decline, paced by Xero. Infratil gained on news it had sold its Australian electricity operations for A$605 million.

The NZX 50 Index fell 13.105 points, or 0.3 percent, to 5210.86. Within the index, 28 stocks fell, 16 rose and six were unchanged. Turnover was a lighter than usual $88.5 million.

Stocks across Asia-Pacific fell with Hong Kong's Hang Seng Index dropping 0.9 percent in afternoon trading and Australia's S&P/ASX 200 Index declining 0.8 percent. Investors mulled a possible independent Scotland, while rising tensions between Russia and Ukraine and the prospect of further US intervention amid escalating violence in Iraq eroded investors' appetite for risk-sensitive assets. Meanwhile, uncertainty ahead of New Zealand's general election on Saturday kept investors cautious.

Growth and tech-based stocks, which are typically seen as being more risk-sensitive, led the fall. Pacific Edge, the Dunedin-based biotech company, declined 5.3 percent to 89 cents. Xero, the cloud-based accounting firm, dropped 5 percent to $20.04.

"It's down to the macro factors, which are dominating it. There is the Scottish separatism vote, then in Europe, with respect to Russia and Ukraine, that is stepping up a gear and the action by Obama against the Islamic State is nothing to be sniffed at. Then combined with that we have the election in New Zealand as well," said Greg Smith, head of research at Fat Prophets. "I think that is why we have seen a bit coming out of the riskier plays and a better performance in the last week from the high-yielding stocks."

Spark New Zealand, which offers a dividend yield of 6 percent, rose 1.8 percent to $3.065.

Fletcher Building fell 1.2 percent to $8.86. Auckland International Airport declined 1.6 percent to $3.79.

Power companies have been particularly volatile ahead of the election with the sector facing increased regulation if there was a change in government.

Contact Energy declined 0.7 percent to $5.61. Meridian Energy was unchanged at $1.40. MightyRiverPower rose 0.2 percent to $2.445. Genesis Energy increased 1 percent to $1.95.

Infratil was the best performer on the day, gaining 6.6 percent to $2.65, its highest close in more than six years. The infrastructure investor sold its Australian energy operations, Lumo Energy and Direct Connect Australia, for A$605 million. After adjustments for final working capital, Infratil estimates net proceeds of between $646 million and $664 million, reflecting a gain on sale of between $343 million and $361 million. Sale costs are estimated to be $57 million, including a $44 million fee to its manager HRL Morrison & Co.

Trade Me Group declined 0.3 percent to $3.46 after New Zealand's biggest online auction site said it bought Wellington-based online credit card payments firm Paystation for an undisclosed sum.

Kathmandu Holdings, the outdoor goods retailer, dropped 1.3 percent to $3.10. Warehouse Group, New Zealand's largest listed retailer, rose 0.3 percent to $3.10. The BNZ-BusinessNZ performance of services index slipped 0.5 points to 57.9 in August, where a reading above 50 indicates increased activity, however, retail trade was one of the few sectors to report a contraction at 47.4.

Outside the benchmark index, Vista Group International rose 3.5 percent to $3. The cinema software and data analytics company was issued a 'please explain' and to confirm it complied with listing rules by NZX regulators given the stock's 62 cent gain to trade at $3.20 this morning from $2.58 on Sept. 3.

Vista director Brian Cadzow said the company complied with NZX and ASX listing rules, without offering any further explanation behind the gain in share price. It was unchanged at A$2.42 on the ASX.

Pumpkin Patch fell 2.4 percent to 40 cents. The childrenswear retailer appointed Steve Mackay as chief financial officer. Mackay has previously worked as general manager of commercial for Ezibuy, the apparel and homeware catalogue retailer. The kids' clothing company is going through a strategic review to boost sales and return to profitability in an increasingly competitive market.

On the NZ Alternative Index, Wool Equities which processes wool for its grower shareholders, de-listed from the small-cap market, having suspended share trading in March. A pre-requisite for a potential merger with Primary Wool Cooperative, a farmer-owned joint venture with wool broker Elders, was for Wool Equities to quit the stock exchange.

(BusinessDesk)