NZ shares fall as investors look to offshore markets

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New Zealand shares fell led by Air New Zealand, as investors looked to crystalise post-election gains and invest in cheaper offshore markets. Contact Energy and Genesis Energy paced the decline while Xero fell to its lowest level in over a year.

The NZX 50 Index fell 24.162 points, or 0.5 percent to 5145.891, paring an intraday drop of 0.9 percent to 5121.71, its lowest level since August. Within the index, 32 stocks fell, 12 rose and six were unchanged. Turnover was $128 million.

Australia's S&P/ASX 200 Index climbed 1.1 percent in afternoon trading. Over the past three months the local bourse has advanced 1 percent, outperforming its trans-Tasman counterpart's 5 percent decline, which has made its stocks begin to look cheap, compared to a fully priced New Zealand market.

The NZX 50 climbed to a record in September, fuelled by energy companies, after the National-led government won the Sept. 20 general election, returning for a third term, removing a threat of major changes to power sector regulation.

"The New Zealand market has been a huge out-performer since the election, and I think it's now profit-taking in New Zealand," said Andrew Bascand, managing director at Harbour Asset Management. "People are switching into Australia. The Aussie market has underperformed by so much in the last two weeks or three weeks, and the New Zealand market has outperformed it."

Air New Zealand, the national carrier, dropped 3 percent to $1.785 and has advanced 18 percent since the start of the year. Chorus, the network operator that has gained 30
percent since the beginning of the year, fell 1.3 percent to $1.875.

Contact Energy fell 0.7 percent to $5.87. The power generator and retailer held its annual meeting in Wellington and gave no hint to shareholders of plans for a capital return, although chairman Grant King told BusinessDesk there would be a steer at the time of the company's half-year result, in February. The company has completed a seven year capital investment phase and is looking to stack cash in coming years.

Genesis Energy slipped 0.5 percent to $1.91. Trustpower declined 0.6 percent to $7.13. Infratil, the infrastructure investor which has majority stake in Trustpower, fell 0.2 percent to $2.82. Meridian Energy was unchanged at $1.53, as was MightyRiverPower at $2.58.

Xero, the cloud-based accounting software firm, extended its decline falling 2.5 percent to $17.50, the lowest it's been since September last year, and paring an intra-day drop to as low as $16.75. The stock has fallen some 62 percent from its March high of $45.99, in part as a shift in global sentiment has seen investors look again at valuations of tech-based, momentum stocks, like Xero.

Fellow growth-orientated stocks were sold off. Pacific Edge, the Dunedin-based biotech firm, dropped 2.3 percent to 87 cents. Outside the benchmark index, ikeGPS Group, the remote measuring device company, declined 2.2 percent to 90 cents and Wynyard Group, the security software developer, fell 4.4 percent to $1.98.

Fletcher Building, New Zealand's largest listed company fell 1.2 percent to $8.57. Spark New Zealand, formerly Telecom, declined 0.9 percent to $2.855.