NZX drops on outlook sell-off

The NZX fell yesterday led by Freightways after it issued a weaker outlook.

New Zealand shares slipped yesterday, led by Freightways on its grimmer outlook for the second half of the year, while Steel & Tube Holdings continued to rise.

The S&P/NZX 50 Index decreased 2.2 points, or 0.04 per cent, to 6139.47. Within the index, 26 stocks fell, 14 rose and 10 were unchanged. Turnover was $143.5 million.

Freightways led the index lower, dropping 2.7 per cent to $6.05. The courier and logistics business posted a 5.5 per cent gain in first-half profit on strong earnings, but warned conditions will be challenging in the second half, given the current volatility in markets and the dairy downturn taking money out of the New Zealand economy and denting confidence.

"It's normally a bit of a bellwether to the underlying New Zealand economy," said Rickey Ward, New Zealand equity manager at JBWere.

"The result was on the slightly disappointing side, depending which analysts you talk to, but it's more about the outlook comments. It's a company that's leveraged to an underlying economy which we believe is going okay."

MightyRiverPower shed 2 per cent to $2.65 ahead of its first-half result today, while Orion Health Group declined 1.8 per cent to $2.70.

Trade Me Group dropped 1.6 per cent to $4.19, Kathmandu Holdings lost 1.3 per cent to $1.50, and Port of Tauranga fell 1.1 per cent to $17.80.

Steel & Tube Holdings was the biggest gainer on the index, up 3.6 per cent to $2.30, a six-week high.

"It beat most people's expectations," Ward said. Separately, ASX-listed BlueScope Steel, which owns New Zealand Steel, today reported a more than doubling in first-half profit, which Ward said indicated the broader steel industry was "a sector that's going okay."

SkyCity Entertainment Group rose 2.3 per cent to $4.49, with Fisher & Paykel Healthcare up 2.2 per cent to $8.99. Westpac Banking Corp gained 1.3 per cent to $32.30.

- BusinessDesk