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Local stocks fall on grim trading day

NZ NewswireNZ Newswire 10/08/2016 Jonathan Underhill

© Getty Images New Zealand shares fell, pushing the S&P/NZX 50 Index down from a record high, as SkyCity Entertainment Group posted full-year profit growth that missed some analyst forecasts, underlining the high expectations built into earnings season this year. Sky TV, NZX and Air New Zealand paced the decline.

The NZX 50 fell 13.55 points, or 0.2 per cent, to 7349.61, having gained more than 16 per cent this year. Within the index, 24 stocks fell, 20 rose and seven were unchanged. Turnover was $167 million.

SkyCity dropped 3.5 per cent to $4.96 after reporting a 13 per cent gain in full-year profit to about $146 million as sales rose 9.1 per cent to $1.1 billion. Analysts at First NZ Capital had expected profit before one-time items of $156 million.

"This could be a little bit of a theme for the reporting season, where companies are not going to match the high expectations set," said Grant Williamson, a director at brokerage Hamilton Hindin Greene. "The market has possibly run a little bit too hard."

Air New Zealand, which is scheduled to report full-year results on Aug. 26, declined about 2 per cent to $2.225. First NZ Capital is forecasting a 75 per cent surge in profit but added that with "a significant step up in competition", outlook comments on yield, load factor and fixed cost leverage in FY17 "will be crucial".

Sky TV, which also reports annual results on Aug. 28, fell 1.8 per cent to $4.89.

NZX fell 1.9 per cent to $1.02 and Freightways declined 1.6 per cent to $6.66.

Hallenstein Glasson Holdings' share rose 4.5 per cent to $2.80.

Kathmandu continued its rally, rising 2 per cent to $2. Last week, the retailer said its annual profit rose as much as 67 per cent on fatter margins.

Summerset Group, the retirement village operator that reports next Monday, rose 2.6 per cent to $4.82 and was the biggest gainer on the index.

Chorus rose 1.7 per cent to $4.50, Heartland Bank gained 1.5 per cent to $1.40 and Trade Me Group rose 1.4 per cent to $4.99.

Outside of the benchmark index, TeamTalk fell 2 per cent to 48 cents.

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