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Shares fall as election uncertainty weighs

NZ Newswire logoNZ Newswire 13/09/2017

New Zealand shares continued to decline on Wednesday as election uncertainty dampens investor enthusiasm.

Sky Television and Kathmandu dropped while CBL Corp bounced from its recent decline.

The S&P/NZX50 Index dropped 12.98 points, or 0.2 per cent, to 7827.43. Within the index, 27 stocks fell, 17 rose and six were unchanged. Turnover was $191 million.

Matt Goodson, managing director at Salt Funds Management, said there was a lack of corporate news following reporting season with a number of companies busy with investor roadshows.

The local market bucked the trend by not following international markets higher over the last couple of days, although the bourse initially responded well to the latest general election poll released on Tuesday night showing the incumbent National Party back in front, Mr Goodson said.

The local index is down 0.3 per cent this week, although it's still up 13.9 per cent for the year.

Overnight, the S&P 500, Dow Jones and Nasdaq Composite all closed at records, rallying as recent fears about nuclear tension with North Korea and natural disaster damage diminished.

Sky TV led the NZX50 lower, down 3.3 per cent to $2.61 and Kathmandu Holdings declined 2.7 per cent to $2.15. Mercury dropped 3.1 per cent, or 10.5 cents, to $3.34.

CBL gained 2.5 per cent to $2.92. The stock had dropped 6.6 per cent this week before the rise. Last month, the company flagged a $16.5 million increase in CBL Insurance's reserves to cover future claims.

"Obviously it has been sold down fairly aggressively, whenever a stock has been sold down that hard you often see a sharp bounce. I don't think there's anything more to it than that," Mr Goodson said.

Vector rose 2.8 per cent to $3.30 while Contact Energy gained 2.1 per cent to $5.44.

Outside the benchmark index, Turners Automotive Group was halted at $3.36 on the NZX. It intends to raise as much as $30m by selling new shares to help fund future growth.

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