New Zealand shares fell as Fletcher Building dropped to a 14-year low, adding to yesterday's rout after its profit warning. Trade Me soared to a record on a potential takeover.
The S&P/NZX 50 index dropped 47.9 points, or 0.5 per cent, to 8,672.40. Within the index, 29 stocks fell, 14 gained, and seven were unchanged. Turnover was $195.7 million.
Fletcher fell 4.7 per cent to $4.70, the lowest level since mid-2004. That added to yesterday's 11 per cent slump when Fletcher warned first-half earnings will fall 10 per cent and noted tougher conditions in Australia. The stock was the most heavily traded, with 7.2 million shares changing hands today, compared to the 1.2 million 90-day average.
David Price, a broker at Forsyth Barr, said Fletcher struggled to capitalise on New Zealand's construction boom which is passed its peak and now faces a slower market across the Tasman also.
"What people are concerned about is that this is just the start of the downturn," he said.
Growth stocks were also weaker as the local market joined a worldwide decline amid fears that slower global growth will crimp company earnings.
A2 Milk fell 3.4 per cent to $10 on average volumes, Gentrack Group declined 3.7 per cent to $6.45 on very light trading and Pushpay Holdings was down 3.3 per cent at $2.90 on more than twice its average volume.
Price said the heightened volatility in financial markets hadn't been accompanied by volumes associated with panic selling, but the local market was drifting lower.
"Profit growth is not really there to support these higher multiples," he said.
Trade Me was the stand-out in the market, jumping 16 per cent to a record close of $5.93. The online auction site received a non-binding offer from UK private equity firm Apax Partners at $6.40 a share. Some 4.8 million shares changed hands, more than 10 times the average volume of 385,000.
Price said Trade Me had been heading in the right direction and that the offer price was a stamp of approval for what the company had done.
Spark New Zealand fell 0.8 per cent to $4.155 on volumes of 4.2 million, while Freightways declined 1 per cent to $6.80 on 2.3 million shares traded. Precinct Properties New Zealand was unchanged at $1.415 on a volume of 2 million.
Among other companies with volumes of more than one million, Argosy Property rose 0.5 per cent to $1.125, SkyCity Entertainment increased 1.4 per cent to $3.66, Z Energy gained 1.5 per cent at $5.97, Fisher & Paykel Healthcare slipped 0.5 per cent to $12.83 and Meridian Energy fell 0.9 per cent to $3.22.
Fonterra Shareholders' Fund units declined 0.2 per cent to $4.81 on slightly larger volumes than normal. Dairy prices fell at the latest GlobalDairyTrade auction, led by weaker prices for milk fat and butter prices.
Of companies reporting tomorrow, Stride Property declined 1.1 per cent to $1.88 and AFT Pharmaceuticals was unchanged at $2.25.
Outside the benchmark index, NZME slumped 18 per cent to 53 cents, a two-year low. The company today warned that annual earnings will fall by as much as 21 per cent and said it probably won't pay a final dividend.