Wednesday 8th July 2015 |
Text too small? |
New Zealand shares fell in a widespread selloff as China's stock market extended its tumble. Xero, Trade Me Group, SkyCity Entertainment Group and Westpac Banking Corp declined.
The S&P/NZX 50 Index fell 35.47 points, or 0.6 percent, to 5767.7. Within the index, 30 stocks fell, nine rose and 11 were unchanged. Turnover was $177 million.
The Shanghai SE Composite Index was down 3.8 percent in afternoon trading, and has slumped 29 percent over the past month, triggering selloffs across the region as investors fret over signs of weakness in the world's second largest economy. The turnaround in Chinese equity markets ended a more than 150 surge in the past 12 months which was driven by demand from domestic investors trading on borrowed funds as the People's Bank of China cut interest rates to stimulate the economy.
"It is boom and bust over in China - the market has had a huge rally and markets can't sustain that sort of rally without having a very good-sized correction on profit taking and leveraged selling," said Grant Williamson, director at Hamilton Hindin Greene. "It does have an effect on commodity prices. A weaker Chinese economy will certainly have a large effect on both New Zealand and Australia on our commodity and exports to that country. It is certainly a concern for New Zealand and Australia."
Dual-listed stocks fell, as Australia's S&P/ASX 200 Index dropped 1.8 percent on China's market meltdown. Xero, the cloud-based accounting software firm, led the benchmark index lower, down 3.4 percent to $17.05. SkyCity, the casino operator, dropped 1.6 percent to $4.28. Westpac, one of Australia's big four banks, declined 1.8 percent to $36.96. Australia and New Zealand Banking Group fell 2.6 percent to $35.93.
Units in Fonterra Shareholders' Fund, which give holders access to Fonterra Cooperative Group's dividend stream, dropped 0.6 percent to $4.80.
Utility companies fell amid uncertainty over the future of the Tiwai Point aluminium smelter, which uses about a seventh of the country's produced energy. Meridian Energy, which currently supplies the smelter, dropped 2.7 percent to $2.185. Genesis Energy slid 2.9 percent to $1.69. Contact Energy fell 0.4 percent to $5.02. MightyRiverPower declined 1.1 percent to $2.82.
Of the day's few gainers, Summerset Group Holdings was the best performer, up 1.9 percent to $3.78, and extending yesterday's 4.8 percent increase after the nation's third-largest retirement village operator said annual earnings may rise as much as 39 percent as it benefits from record sales of units. It achieved a record 110 resales in the six months ended June 30, as well as 160 new sales.
Outside the benchmark index, Pushpay Holdings fell 1.2 percent to $4.05. The mobile payments app developer boosted revenue 39 percent in the first quarter to $12.8 million as growth in its US faith-based merchants offset a decline in its SMS business.
Pyne Gould Corp, the asset management firm controlled by managing director George Kerr, dropped 12 percent to 30 cents. Yesterday it said it will restate its 2014 accounts, reducing profit and net assets by 7 million British pounds, after receiving the audited accounts of associate Torchlight Fund LP.
BusinessDesk.co.nz
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes