Doubts over Tiwai Point hit power firms

Shares in Meridian Energy fell 3 per cent to close at $2.075 yesterday.

Investors waiting to hear future of aluminium smelter are also nervous about problems in Greece and China.

New Zealand shares fell, led by power companies, including Meridian Energy and Mighty River Power, as uncertainty over the future of the Tiwai Point smelter continues to weigh on investment decisions.

The S&P/NZX 50 Index declined 18.64 points, or 0.3 per cent, to 5706.7. Within the index, 27 stocks fell, 13 rose and 10 were unchanged. Turnover was $121 million.

Utility companies fell as investors wait for a decision on whether the Tiwai Pt aluminium smelter, which uses one-seventh of the country's energy and is contracted to Meridian, will remain open or seek to change existing power arrangements.

Owner New Zealand Aluminium Smelters was due to make a decision at the start of this month, but has since pushed that out until early next month.

Meridian led the benchmark lower, down 3 per cent to $2.075. Mighty River Power declined 0.4 per cent to $2.825. Genesis Energy fell 0.3 per cent to $1.695. Contact Energy was unchanged at $4.91.

"I think that is weighing on it a little bit," said Grant Williamson, director at Hamilton Hindin Greene. "We will know next month just what is going to happen there."

Local investors were cautious after the uncertainty surrounding Greece and its debt crisis and a sharp correction on Chinese stock exchanges saw widespread selling of risk-sensitive assets in recent weeks.

"Investors have decided to take a few profits on the day," Williamson said.

A summit of eurozone leaders reached an agreement with Greece late yesterday for a bailout programme that includes serious reforms and aid, removing an immediate threat that Greece could collapse financially and leave the euro.

Chorus fell 2.3 per cent to $2.775. Argosy Property declined 0.9 per cent to $1.08. Ebos Group dropped 1 per cent to $10.15. SkyCity Entertainment Group retreated 2.2 per cent to $4.10. Trade Me Group declined 2.1 per cent to $3.22 - its lowest level since March 2012.

Of the day's few gainers, Kathmandu Holdings, the outdoor adventure firm under a takeover bid by Briscoe Group, was the best performer, up 1.9 per cent to $1.65. Briscoe, the homeware chain controlled by Rod Duke, was unchanged at $2.70.

A2 Milk Co, the milk marketing business, rose 1.4 per cent to 74c.

Auckland International Airport, the nation's busiest gateway, declined 0.4 per cent to $5.14.

Spark New Zealand fell 0.4 per cent to $2.775.

Fletcher Building, the construction and building supplies firm, rose 0.4 per cent to $7.88.

- additional reporting AP