New Zealand shares fell amid concern the failure of US President Donald Trump to push through his policy reforms means US growth won't be as robust as some investors had hoped, denting global sentiment. Summerset Group, Trade Me and Metro Performance Glass led the decline.
The S&P/NZX 50 Index declined 11.11 points, or 0.2 per cent, to 7,062.72. Within the index, 23 stocks fell, 22 rose, and five were unchanged. Turnover was $147 million.
With little local news, the New Zealand bourse took its lead from Wall Street, where the Dow Jones Industrial Average and the Standard & Poor's 500 ended lower last week following Trump's failure to push through reforms of Obamacare, even with a US parliament stacked with Republicans. Trump has said he will now focus on another campaign pledge - cutting taxes.
"If he was to get through with those corporate tax changes that would be huge boost for US companies and the US economy, which would send a lot of inflation out globally," said Peter McIntyre, an investment adviser at Craigs Investment Partners. "But it seems more of a slow process, particularly with the Obamacare repeal that's fallen through."
Summerset, the retirement village operator, fell 2.9 per cent to $4.98, leading the index lower. Trade Me, the auction website, fell 1.5 per cent to $5.10 while MetroGlass fell 2.1 per cent to $1.42 and is the worst performer on the benchmark index this year, ahead of Fletcher Building.
McIntyre said both companies are exposed to an intensely competitive building sector, with more businesses chasing work put out to tender. "It's all very well winning a tender but it has to be profitable." Building firms were also struggling to find enough workers given the high demand, he said.
