MARKET CLOSE: NZ shares fall again, Mercury, Auckland Airport drop while Comvita rallies

New Zealand's share slump continued for a second day yesterday, with Mercury and Auckland International Airport leading the index lower.

The S&P/NZX50 Index fell 30.52 points, or 0.4 percent, to 7,249.24. Within the index, 20 stocks fell, 24 rose and six were unchanged. Turnover was $146 million.

The index bounced early in the day, having dropped 2.5 percent yesterday in response to Friday's Wall Street sell-off, but was back in the red by the close. Asian markets were mixed in the afternoon's trading, with NZ shares again declining by more than Australia's S&P/ASX 200 which was down 0.1 percent at 5.10pm.

"It's been a theme for quite some time that we've continually outperformed Australia," said David Price, a broker at Forsyth Barr. "There have been some quite sharp corrections, bearing in mind that we've seen some prolific runs up as well. The market's had a very, very strong year but things can't always continue that way. Some of the stocks selling on Monday were viewed by the locals as not being particularly cheap, hence they moved a long way before they found support."

Mercury was the worst performer, down 7.4 percent, or 23 cents, to $2.90. It gave up rights to an 8.6 cent final dividend and a 4 cent special dividend.

"That [dividend] speaks for half of it but not the other half," Price said. "What we've seen globally is a bit of a rotation out of utilities and safe stocks into stocks that are more cyclical."

Auckland International Airport fell 2.9 percent to $6.815, Ryman Healthcare dropped 2.6 percent to $9.34, and Vector was down 2.1 percent to $3.20.

Argosy Property gave up rights to a 1.525 cent interim dividend and declined 1.5 cents to $1.14.

Comvita was the biggest gainer, up 5 percent to $11.02. The stock has gained 25 percent this year, having joined the NZX 50 index in April. Price said the natural health products company was "a story that a lot of people are heading towards at the moment."

Two of Monday's biggest decliners, Tower and Air New Zealand, gained yesterday, with Tower up 2.4 percent to $1.065 and Air NZ gaining 2.6 percent to $1.985.

Nuplex, which was in the NZX50, delisted from the NZX and ASX. Earlier this month it confirmed its takeover by Allnex Belguim SA had received antitrust clearance from the European Commission, paving the way for its transfer into the hands of the private-equity backed Belgian company to create one of the world's largest makers of coating resins.

(BusinessDesk)

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