MARKET CLOSE: NZ stocks fall on profit taking, weak sentiment; A2 drops

New Zealand stocks fell as some investors opted to take profits on a few stocks like A2 Milk and as sentiment was weighed on by a slide in global markets, although both Xero and Z Energy continued to push higher after positive results yesterday.

The S&P/NZX 50 Index lost 37 points or 0.5 percent to 7,452.38. Within the index, 26 stocks fell, five were unchanged and 19 rose. Turnover was $131 million.

"The market overall is weaker here and in Australia, following offshore leads," said Suzanne Kinnaird, an investment adviser for Forsyth Barr.

US stocks fell overnight after several large department stores reported worse-than-expected sales drops. Against that backdrop, Asian stocks struggled to gain much traction. Korea's Kospi was off 0.4 percent, while Australia's S&P/ASX 200 declined 0.8 percent and Japan's Topix was trading down 0.5 percent.

A2 Milk led the index lower, shedding 6.8 percent to $3.54, largely on some profit taking.

"It's had such a strong run of late," said Kinnaird. The stock is up more than 60 percent so far this year as investors are cheered about its prospects in China. Fisher & Paykel Healthcare shed 2.5 percent to $10.25, also likely on some profit taking as the exporter has gained in recent sessions on the back of the weaker New Zealand dollar, she said.

Fletcher Building lost 2.9 percent to $8.33. Sentiment may have been weighed by data that shows the housing market may be coming off the boil in Auckland. Earlier, data from the Real Estate Institute showed the national median house price was $540,000 in April, down 0.5 percent versus March when the price was $542,500. In Auckland, however, prices dipped 5.6 percent on the month in April.

Vital Healthcare ended down 2 percent at $2.23, also possibly on some profit-taking after the stock got a solid lift yesterday on news it entered a conditional agreement with Acurity Health Group to become its long-term real estate capital partner.

In the other direction, Xero added 0.9 percent to $23.20 as investors remained upbeat after the company said Thursday its net loss was $69.1 million, narrower than the $82.5 million reported in the prior period. Z Energy, which said Thursday it had more than tripled its annual profit after acquiring Chevron New Zealand's Caltex and Challenge! brands, also continued to benefit, adding 0.1 percent to $7.90.

Warehouse Group added 2.4 percent to $2.17. Earlier Friday it posted a slower rate of sales growth in the third quarter as it made changes to its business but affirmed it's on track to meet its forecast annual profit.

TeamTalk added 7 percent to $0.76 after investors were cheered by news it expects to have more cash on hand after reaching two deals to slim down and put off major capital spending on its CityLink fibre network.

Ryman Healthcare, the biggest listed retirement village operator, added 1.4 percent to $8.59 on news its new Devonport village is set to proceed following a successful outcome to mediation talks with objectors.

Looking ahead, investors will be waiting for more corporate results with Ryman Healthcare and Rakon due to report next week, among others. Rakon added 4.8 percent to NZ$0.22.

(BusinessDesk)