Market close: shares fall with ASX, China data - A2, Argosy, NZX drop

New Zealand shares fell in a session disrupted by a stock exchange outage, as Australian stocks fell and Chinese manufacturing weakened. A2 Corp, Argosy Property and NZX paced the decline.

The NZX 50 Index fell 22.122 points, or 0.5 percent, to 4418.051. Within the index, 22 stocks fell, 14 rose and 14 were unchanged. Turnover was about $71.5 million.

Westpac Banking Corp fell 3.8 percent to $33.30, leading a decline by Australian companies on the NZX after the S&P/ASX 200 Index fell more than 2 percent. Two measures of Chinese manufacturing for June weakened, raising doubts about demand in Australia's largest market and New Zealand's second largest.

A2 Corp, which is targeting the Chinese market for infant formula sales, fell 3 percent to 62 cents. Australia & New Zealand Banking Group slipped 2.9 percent to $33.20 and AMP dropped 1.8 percent to $5.01.

"The market has been in correction phase for a few weeks now," says Grant Williamson, a director at Hamilton Hindin Greene. "Australia being down is putting pressure on local investors to take profits. Companies with exposure to Australia and China are under a bit of pressure."

Fletcher Building fell 0.2 percent to $8.41 as the Australian market weakened. The kiwi dollar's advance to near a five-year high against the Australian dollar is also denting sentiment for companies doing business across the Tasman, Williamson said.

Argosy fell 2 percent to 96 cents after announcing a one-for-seven rights issue at 89 cents a share to raise $87 million. The property investors made a similar-sized placement in December and raised $20 million in a share purchase plan in February. The new funds will repay bank debt used to make acquisitions.

Some weakness is normal after a company announces a capital raising though "some investors will be a bit surprised they came back to the well so soon after the last one", Mr Williamson says.

NZX dropped 1.5 percent to $1.32. The market operator is still investigating the technical glitch that led to trading being disrupted for at least three hours.

SkyCity Entertainment Group slipped 0.2 percent to $4.35 after the casino and hotel operator and the government agreed keep talking for another five days as they try to finalise the terms of a deal to build a convention centre in Auckland.

They have already reached a high-level agreement where SkyCity will build the $402 million centre in exchange for regulatory concessions, but are working out the finer points.

Contract labour firm AWF Group rose 0.4 percent to $2.85 after a Westpac McDermott Miller survey showed improving employment confidence outside Christchurch and Auckland, which have been underpinning jobs growth with their major construction projects.

Tenon surged 22 percent to a five-year high $1.35. The company, which sells wood mouldings into the US, has reported a rising share price as home building in the US improves. Controlling shareholder Rubicon gained 10 percent to 33 cents.

Telecom fell 2 percent to $2.205 and Fisher & Paykel Healthcare declined 2.3 percent to $3.37. Sky Network Television fell 0.6 percent to $5.40.

(BusinessDesk)