Market close: shares falls in second day of US adjustment - Diligent, Sky TV drop

New Zealand shares fell, pushing the NZX 50 Index to a three-month low, as the prospect of an end to Federal Reserve stimulus continued to drive volatility in equity markets. Diligent Board Member Services and Sky Network Television extended their slide.

The NZX 50 fell 35.451 points, or 0.8 percent, to 4363.07. Within the index, 35 stocks fell, 11 rose and four were unchanged. Turnover was $195 million.

Diligent, whose software helps company directors manage their information flows, dropped 7.2 percent to $7.01. Yesterday the company said it had recognised some revenue earlier than it should have under US accounting standards, the latest in a series of missteps.

Hallenstein Glasson Holdings, the clothing chain, fell 4.1 percent to $4.74, leading most retailers lower on relatively low volumes. Pumpkin Patch, the children's clothing chain, dropped 4 percent to 95 cents.

Restaurant Brands fell 3.9 percent to $2.70, Warehouse Group declined 2.9 percent to $3.67 and Kathmandu, the outdoor equipment retailer, fell 2.4 percent to $2.48.

Nuplex Industries, which makes specialty chemicals, fell 3.4 percent to $2.85 and Steel & Tube Holdings, which supplies building materials to the construction industry, was down 3.2 percent to $2.42.

"The Fed's QE settings have generated a lot of speculative positions including in equity markets," says Andrew Kelleher, a broker at ASB Securities.

Still, the fact that Fed chairman Ben Bernanke can contemplate the end to the stimulus means the US economy is improving and in the long-term equity investors can be more comfortable, he says.

Sky TV dropped 3.2 percent to $5.08, extending its slide since an online rival emerged with the rights to English Premier League football, underlining the capacity of companies to win market share in the pay-per-view market.

OceanaGold, the operator of the Macraes gold field, fell 4.4 percent to $1.53 as spot gold continued its slide.

Chorus, the network company spun off from Telecom in 2011, rose 1.3 percent to $2.39. The company faces too much regulatory risk and too little political will to overcome the cost blowouts and pricing uncertainties under contracts to roll out the ultra-fast broadband network, analysts for Deutsche Bank say.

In a 33-page report, the local branch of the global investment bank puts a "sell" recommendation on Chorus shares, targeting a share price over the next year of $2.29, compared with $2.57 two days ago, when the report was released.

Telecom gained 0.4 percent to $2.27 and Fletcher Building slipped 0.6 percent to $8.10. Mighty River Power declined 2.7 percent to $2.20.

(BusinessDesk)