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New Zealand shares rose as Tegel Group Holdings continued its rebound from last week's record low while Warehouse Group dropped after weaker earnings guidance.
The S&P/NZX 50 Index gained 3.41 points, or 0.05 per cent, to 6,789.66. Within the index, 21 stocks rose, 18 fell and 11 were unchanged. Turnover was $151 million.
Warehouse Group was the worst performer on the index, down 8 per cent to $2.87 after New Zealand's largest publicly listed retailer said profit may fall between 10 and 15 per cent in the first half of its financial year on a weaker-than-expected run up to Christmas.
Rickey Ward, NZ equity manager at JBWere, said the extent of the sell-off was a surprise, as with the rise of online shopping, competition in retail is well-known.
"I don't know if that should have been as big a surprise as what the share price tells us. Retail is difficult and highly competitive and it's really hard to think they'd be immune," Ward said. "It's confirmation of a theme that's well known. Thankfully Warehouse is an incredibly diverse company these days, so it's still making a $40m profit in the first half. It's not a bad company, they're just feeling difficult times."
Metro Performance Glass fell 3.1 per cent to $1.87 and Mercury NZ dropped 2.2 per cent to $2.93.
Tegel was the best performer, up 2.9 per cent to $1.40. The shares hit a record low last Thursday after the company said it would miss its forecast earnings as a glut of chicken keeps a lid on domestic prices and rising freight costs squeezes margins.
"The bounce is a little bit surprising given the commentary - nothing fundamental in the environment has changed, and it did deserve to get sold," Ward said.
Vector gained 2.2 per cent to $3.22, Ryman Healthcare rose 1.7 per cent to $8.34, and Tourism Holdings gained 1.5 per cent to $1.41.
A2 Milk declined 1.5 per cent to $2.04. A2 began declining last Monday on the news that rival Australian formula producer Bellamy's had gone into a trading halt on the ASX, and had dropped 14 per cent before a bounce on Friday, but resumed falling this week. Bellamy's is still in a trading halt which is set to be lifted tomorrow.
"It's drifted back down and is languishing a little bit. One would assume that what's happening with Bellamy's will have a bearing on A2," Ward said.
Outside the main index, Smiths City Group fell 1.4 per cent to 69 cents. The appliance and furniture retailer reported a 46 per cent drop in first-half profit as it faced new restructuring costs and a year-earlier gain on its Colombo St store wasn't repeated, even as underlying earnings and sales rose.
Rakon jumped 28 per cent to 22 cents. The shares hit their highest level in seven months after the high-tech components maker said it will raise US$10 million from Taiwan's Siward Crystal Technology, selling shares at a steep premium to repay debt while gaining a new partner with an established crystal manufacturer.
Sealegs advanced 17 per cent to 10.8 cents. The Auckland-based company, which manufactures and sells amphibious boats and systems in New Zealand and overseas, today announced plans to expand globally and to change its name.
AFT Pharmaceuticals was unchanged at $2.75. It expects to benefit from news that all medicines containing codeine will be prescription-only in Australia from February 1, 2018. Australia's medicine's watchdog, the Therapeutic Goods Administration or TGA, today confirmed products containing codeine will not be able to be sold over the counter in pharmacies.