MARKET CLOSE: Shares fall; Spark, ANZ, Westpac drop on offshore weakness

New Zealand shares fell, paced by Spark New Zealand as offshore weakness weighed on the local bourse. Australia and New Zealand Banking Group and Westpac Banking Corp fell as Australian lenders continued with plans to raise further capital.

The NZX 50 Index fell 32.916 points, or 0.6 percent, to 5729.353. Within the index, 31 stocks fell, 10 rose and nine were unchanged. Turnover was $170 million.

Overnight chair of the US Federal Reserve Janet Yellen warned valuations were too high, causing Wall Street to drop. Markets across Asia-Pacific followed suit with Japan's Nikkei 225 Index falling 1.1 percent in afternoon trading, while Australia's S&P/ASX 200 Index slipped 0.6 percent and Hong Kong's Hang Seng declining 0.6 percent.

Spark, formerly Telecom Corp, dropped 2.7 percent to $2.88. Xero, the cloud-based accounting software firm, declined 1.5 percent to $19.15. Fisher & Paykel Healthcare, the breathing apparatus manufacturer and exporter, fell 1.8 percent to $6.48. Air New Zealand, the national carrier, slipped 0.4 percent to $2.79.

"We've seen pretty weak markets globally," said Shane Solly, director at Harbour Asset Management. "Overnight we've seen some pretty negative comments from Janet Yellen, and the Federal Reserve was talking about equity markets being full."

Across the Tasman Australian banks are raising cash to bolster their equity buffers in the face of increasing regulatory pressures from the Australian Prudential Regulation Authority. Earlier this week Westpac announced a A$2 billion capital raise via its dividend reinvestment plan, while today National Australia Bank will raise A$5.5 billion via a share sale, in what will be the country's biggest ever capital raise. Dual-listed Australian banks fell. ANZ dropped 1.8 percent to $35.42. Westpac slipped 0.7 percent to $36.46.

"NAB has announced a A$5.5 billion equity raising so it's certainly drawing a lot of attention from those investors who are seeking income yield," Solly said. The capital raisings added to offshore weakness and weighed on the local bourse, Solly said.

Heartland New Zealand was one of the day's few gainers, up 1.5 percent to $1.33 after coming out of a trading halt. Quadrant Private Equity put in a block order for its 8.75 percent stake in the Christchurch-based lender, via brokerage First NZ Capital offering the shares at $1.30, a 1 cent discount to where the shares had last traded prior to the trading halt.

Z Energy was unchanged at $5 after the service station chain posted a 10 percent increase in full-year operating earnings to $241 million, as fuel and refining margins improved and it sold more fuel.

Pacific Edge, the non-invasive bladder cancer test developer, led the benchmark index lower dropping 5.4 percent to 70 cents. Its Cxbladder Detect received a favourable comparison with a leading bladder cancer detection product, UroVysion FISH, in the medical journal BioMed Central ("BMC") Medical Research Methodology.

(BusinessDesk)