MARKET CLOSE: Stocks fall on ‘tech and growth sell off’; Xero, A2, Pacific Edge decline

New Zealand shares fell as investors sold tech and high-growth companies, taking advantage of recent gains to raise cash for the government's Genesis Energy sale. Xero slipped to a three month low. A2 Milk Corp and Pacific Edge paced the decline.

The NZX 50 Index fell 48.061 points, or 0.9 percent, to 5075.840. Within the index, 29 stocks fell, 12 rose and nine were unchanged. Turnover was relatively low at $96.9 million.

The benchmark index has gained 8.2 percent since the start of the year, and investors are now taking the opportunity to raise funds to buy Genesis shares. New Zealand's largest electricity retailer by customer base is the last on the block in the government's partial privatisation programme and is considered attractive because of its relatively high dividend yield.

Xero, which has risen 220 percent in the past year, dropped 5.8 percent to $35.60. A2 Corp, the milk marketer which gained 49 percent in the past 12 months, fell 2.3 percent to 85 cents. Bio-tech company Pacific Edge, which gained 112 percent last year, slid 3 percent to $1.29.

"They had performed very well over a short period and there is one deal in particular which we are seeing a bit of selling to fund and that's the Genesis issue," said Greg Easton, investment advisor at Craigs Investment Partners. "Because the market had run so well everyone would like to see a bit of heat come out of it."

Tech stock outside the benchmark index also fell, security software firm Wynyard Group declined 6.4 percent to $2.65. SLI Systems, the retail website search engine company, dropped 7.7 percent to $2.03. App maker GeoOp slid 9.1 percent to $1.60.

Energy stocks weakened. Auckland lines company Vector slipped 2 percent to $2.45. Meridian Energy dropped 0.9 percent to $1.14 and MightyRiverPower declined 0.5 percent to $2.16. Contact Energy fell 0.4 percent to $5.28.

Fletcher Building, New Zealand's largest listed company, fell 1.6 percent to $9.44. Auckland International Airport declined 1.5 percent to $3.89, while Telecom slipped 0.2 percent to $2.525.

Retailers paced the decline as outdoor goods retailer Kathmandu Holdings dropped 3.4 percent to $3.74. Brisbane-based jewellery chain Michael Hill International slid 2.2 percent to $1.33. Warehouse Group, New Zealand's largest listed retailer, slipped 0.3 percent to $3.20. Trade Me Group, the online auction website, declined 2.5 percent to $3.91.

Property stocks largely ignored the market's decline. Property For Industry gained 0.4 percent to $1.28 and DNZ Property Fund gained 0.3 percent to $1.53. Goodman Property Trust was unchanged at 99.5 cents, as was Goodman Property Trust at 96.5 cents and Argosy Property at 91 cents.

"It's a sector the market has sort of forgotten because there is no obvious growth in commercial rents," Easton said. "With the promise of increasing interest rates that is one sector that would underperform in that environment but because they haven't been dragged up with the rest of the market they now look exceptionally good value."

OceanaGold was the best performer, rising 3.1 percent to $2.68. Freightways advanced 1.3 percent while casino operator SkyCity Entertainment Group climbed 0.5 percent to $3.92.

(BusinessDesk)