NZ shares fall as gloomy building sector weighs on Fletcher

Fletcher Building led the market lower, down 2.6 per cent at $4.96. Photo / Bloomberg

New Zealand shares fell as a gloomy local construction sector and warnings about the state of building conditions in Australia weighed on Fletcher Building.

The S&P/NZX 50 Index declined 21.2 points, or 0.2 per cent, to 10,857.75. Within the index, 22 stocks fell, 23 rose, and five were unchanged. Turnover was $143.7 million.

Fletcher Building led the market lower, down 2.6 per cent at $4.96 on a volume of almost 2 million shares, almost twice its 90-day average of 973,000. The ANZ Business Outlook survey today showed another deterioration in business confidence, with the construction sector the most downbeat about the current environment.

Meanwhile, across the Tasman, cement maker Adelaide Brighton ditched plans for an interim dividend and downgraded earnings due to deteriorating conditions in residential and civil construction. The ASX-listed stock sank 19 per cent to A$3.505 in afternoon trading, dragging down other building materials stocks such as Boral.

"When you come back to the business confidence survey, there's some nervousness around the state of the New Zealand economy," said Greg Smith, head of research at Fat Prophets.

"And we had the Adelaide Brighton warning, which weighed on most stocks in that segment."

Outside the benchmark index, glass products maker Metro Performance Glass fell 1.3 per cent to 37.5 cents. Local steel products companies bucked the trend after Steel & Tube Holdings said earnings met its recent guidance. It rose 8.1 per cent to 94 cents and stainless steel fabricator Mercer rose 10 per cent to 22 cents.

Blue-chip stocks were among those to decline. Auckland International Airport fell 2 per cent to $9.305 on a volume of 2 million shares, Fisher & Paykel Healthcare was down 1.8 per cent at $16.50, Meridian Energy decreased 1.2 per cent to $4.705 on a volume of 1 million shares and Z Energy dipped 0.9 per cent to $6.49.

Spark New Zealand was the day's most traded stock on a volume of 3.7 million, more than its 3.2 million average, and rose 0.8 per cent to $3.98. Kiwi Property Group rose 0.3 per cent to $1.62 on a volume of 3.3 million, more than twice its 1.5 million average. SkyCity Entertainment Group advanced 0.5 per cent to $4 with 2.4 million shares changing hands.

Of other stocks trading on volumes of more than a million shares, Arvida Group fell 0.7 per cent to $1.37, Precinct Properties New Zealand was unchanged at $1.785, and Air New Zealand decreased 0.6 per cent to $2.715.

Gentrack Group posted the day's biggest gain, up 2.9 per cent at $5.30 on a volume of just 27,000 shares, about a quarter of its 117,000 average. Ebos Group rose 1.4 per cent to $24.94 and A2 Milk climbed 1.2 per cent to $18.02, a record close for the country's biggest listed company.

"A2 is still the go-to stock in that space - the valuation has already gotten up there ahead of its result next month," Smith said.

Synlait Milk, which supplies A2, rose 0.4 per cent to $10.05.

Among companies that held annual meetings today, AWF Madison was unchanged at $1.75, Kingfish fell 0.7 per cent to $1.46, and Pacific Edge rose 6.1 per cent to 21 cents.

Fonterra Cooperative Group's 2021 bond paying annual interest of 4.33 per cent was the most traded debt security on a volume of 2.2 million. The notes closed at a yield of 2.21 per cent, down 1 basis point. Fonterra's farmer-owned shares were unchanged at $3.76, while the Fonterra Shareholders' Fund units rose 0.5 per cent to $3.77.