Shares fall as China's ripples spread

Budget retailer Warehouse Group led decliners after it warned its first half profits could fall as much as 13%. Photo / NZ Herald

Retailers lead slide as Warehouse issues profit warning

New Zealand shares fell yesterday as the market joined a region-wide decline, and was paced by retailers after the Warehouse Group joined Hallenstein Glassons in issuing a profit warning.

The NZX 50 Index fell 39.263 points, or about 0.8 per cent to 4911.076. Within the Index 35 stocks fell, seven rose and eight were unchanged. Turnover was $101.7 million.

Across the Asian markets, there was a downturn after Chinese data showed manufacturing was shrinking. Australia's S&P/ASX 200 Index was down 1.2 per cent in afternoon trading, while Hong Kong's Hang Seng Index fell 1.4 per cent and Japan's Nikkei 225 Index slid about 0.4 per cent.

"The negative data out of China flowed on particularly through Australia," said James Smalley, a director at Hamilton Hindin Greene. "We just seem to be following those trends at the moment."

Budget retailer Warehouse Group led decliners after it warned its first half profits could fall as much as 13 per cent. New Zealand's largest listed retailer slid 4.5 per cent to $3.54, its lowest price this year.

Other retail stocks to fall included outdoor equipment chain Kathmandu Holdings, down 4.4 per cent to $3.30. Hallenstein Glasson, punished last week after it issued a profit warning, fell 2.9 per cent to $3.35.

Smalley said the decline among retailers was on light trading volumes, and that "most people want to give the companies the benefit of the doubt".

Listed property entities slid as the talk of an interest rate hike "sooner rather than later" reduced the appeal of property stocks that typically return a steady cash dividend, he said.

Goodman Property Trust fell 1 per cent to 97c. Kiwi Income Property Trust slid 0.9 per cent to $1.10. DNZ Property Fund fell 0.3 per cent to $1.53, and Argosy Property held at 93c.

SkyCity Entertainment Group slipped 1.8 per cent to $3.82. Auckland International Airport slid 1.2 per cent to $3.62. Fletcher Building, fell 0.3 per cent to $9.13. Telecom was down 0.2 per cent to $2.39.

Smalley said some of the heat came out of tech stocks as investors cashed in on profits.

Xero, whose share price has gained 480 per cent in the past 12 months, fell 1.4 per cent to $42.59. Security software company Wynyard slipped 7.6 per cent to $2.93. NZAX-listed GeoOp, which yesterday said it was on track to hit sales targets of its task management app, fell 11 per cent to $2.45. "It could be the old absolute of investors, buy the rumour, sell the fact."