NZ shares drop in region-wide sell-off

Kathmandu was down 4.1 per cent yesterday to close at $1.65.

Uncertainty drags equity markets down after Greek voters reject bailout offer in national referendum.

New Zealand shares fell yesterday in a region-wide sell-off as uncertainty over Greece's financial stability overshadowed equity markets. Dual-listed stocks such as Kathmandu Holdings, Westpac Banking Corp and Australia and New Zealand Banking Group dropped, while Fletcher Building tumbled to the lowest level in more than two years.

The S&P/NZX 50 Index declined 64.27 points, or 1.1 per cent, to 5776.62. Within the index, 36 stocks fell, five rose and nine were unchanged. Turnover was $119 million.

The local market kicked off a region-wide sell-off after Greece's referendum delivered the left-wing Syriza Government a victory, with 61.3 per cent of the country voting to reject the bailout offer from their European creditors and its accompanying austerity measures.

"People dislike a lack of certainty and they get nervous and that's what we're seeing in markets," said Angus Gluskie, managing director at White Funds Management in Sydney.

Dual-listed stocks weighed on New Zealand's market. Kathmandu, the outdoor goods retailer, led the benchmark index lower in afternoon trading, tumbling 4.1 per cent to $1.65. Fletcher Building, the construction and building supplies firm, retreated 2.1 per cent to a two-and-a-half-year low of $7.90. ANZ fell 2.7 per cent to $35.80 and Westpac slid 1.9 per cent to $36.30. Trade Me Group, the online auction site, declined 2.9 per cent to $3.39.

Bryon Burke, head of equities at Craigs Investment Partners, said dual-listed stocks "had a double whammy, because our dollar surprisingly enough has strengthened against the aussie".

Air New Zealand, the national carrier, fell 0.8 per cent to $2.55. Moody's Investors Service upgraded its credit rating by one notch to Baa2 after changing its debt treatment of operating leases and on the prospect that cheaper jet fuel will assist the national carrier's earnings.

Spark New Zealand fell 1.1 per cent to $2.79.

Of the day's few gainers, Pacific Edge, the Dunedin-based biotech firm, was the best performer on the benchmark index, up 1.7 per cent to 61c.

Outside the benchmark index, PGG Wrightson rose 1.1 per cent to 47c. The Commerce Commission is investigating Wrightson over the fees the rural services firm, which is controlled by China's Agria Corp, charged during the implementation of a national livestock tagging programme.

Arvida Group fell 2.3 per cent to 87c. The retirement village settled its $62 million acquisition of Aria Bay, Aria Park and Aria Gardens.

Mercantile Investments was unchanged at 15c in its debut on the local market via a compliance listing. The Sydney-based firm is veteran corporate raider Sir Ron Brierley's investment vehicle.