NZ shares drop, joining Asian market slide, led by Kathmandu, Xero, Fletcher

BusinessDesk

24 Jan, 2014 05:39 AM3 mins to read

File photo / Kenny Rodger

New Zealand shares fell as Asian markets declined for a second day amidst on going concern about a weakening Chinese economy and instability in emerging markets. Kathmandu Holdings, Xero and Fletcher Building paced the decline.

The NZX 50 Index dropped 37.378 points, or about 0.8 percent to 4873.698. Within the index 27 stock fell, 13 rose and 10 remain unchanged. Turnover was $115.6 million.

Across the region markets retreated after Argentina devalued its currency overnight and Turkey's central bank intervened in the Lira, causing investors to shy away from risk-sensitive markets, like New Zealand's. Asian markets also continued to worry about yesterday's data suggesting an economic slowdown in China.

Australia's S&P/ASX 200 Index was down 0.2 percent in afternoon trading, while Hong Kong's Hang Seng Index slipped 0.6 percent and Japan's Nikkei 225 Index was down about 1.7 percent.

"Everything is coming off a little bit, it's certainly not surprising given weakness offshore," said Grant Williamson, a director at Hamilton Hindin Greene. "Really it's just us playing follow the leader with the Asian markets."

New Zealand's biggest listed company Fletcher Building was down 2.7 percent to $8.88, as investors saw the chance to take a bit of profit after the "stock's rally in the past few days and weeks," Williamson said.

Outdoor equipment chain Kathmandu Holdings fell 3.3 percent to $3.19, its lowest share price in over a month. Fellow retailer Hallenstein Glasson dropped 1.5 percent, to $3.30. Warehouse Group, New Zealand's biggest listed retailer which yesterday issued a profit warning, increased 0.3 percent to $3.55.

Wellington-based accounting software company Xero fell 1.9 percent to $41.80. Other tech stock also slipped away as investors again took the opportunity to take profit from these stocks which have rallied significantly since the start of the year, Williamson said. Security software specialists Wynyard Group fell 3.1 percent to $2.84, and SLI Systems, which make retail website search engines, dropped 2.3 percent to $2.59.

Telecom fell 1.1 percent to $2.365, while Skycity Entertainment Group declined 0.3 percent to $3.83.

Of the day's few gainers Lines company Vector rallied on news it had increased electricity and gas customers over six month period ending December. It was up 2.4 percent to $2.58. Auckland International Airport was up 0.3 percent to $3.63.The national carrier, Air New Zealand, also gained 0.9 percent to $1.72.