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NZ shares drop as Trump rattles markets

NZ Newswire logoNZ Newswire 31/01/2017 Sophie Boot

New Zealand shares fell, joining a global selloff as US President Donald Trump spooked markets with his ad hoc policy decisions. Meridian Energy, Warehouse Group and Air New Zealand declined.

The S&P/NZX50 Index dropped 34.8 points, or 0.5 per cent, to 7,050.76. Within the index, 30 stocks fell, 14 rose and six were unchanged. Turnover was $106.7 million

Asian markets were weaker on Tuesday as the impact of Mr Trump's travel ban on refugees and immigrants from Muslim-majority countries, alongside his firing of attorney-general Sally Yates, worried investors.

"The market's had a bit of a run from its mid-December lows, we'd had a nice little bounce, so maybe some people are taking money off the table," said James Smalley, director at Hamilton Hindin Greene.

"It's probably just a defensive tactic, you never know what Mr Trump's going to pull out of the hat, and light volumes exacerbate the selling."

"We may be back in the old trend of following the movement but not the magnitude of the move. It's one of those low-volume, early week days where there's not a lot to move the market, people are waiting for the imminent reporting season in a fortnight for some reads going forward," Mr Smalley said.

Meridian Energy led the index lower, falling 4 per cent to $2.63. The electricity generator-retailer has lost its dispute with the Wellington City Council over $1.2 million in rates paid for its wind farms, with the High Court ruling the council acted lawfully in how it calculated the bill.

Warehouse Group declined 3.7 per cent to $2.62. In December, 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.

Air New Zealand fell 2.8 per cent to $2.10, SkyCity Entertainment Group dropped 2.3 per cent to $3.78 and Z Energy was down 2.3 per cent to $7.28.

Heartland Bank was the best performer, up 1.3 per cent to $1.58, and Metlifecare gained 1.3 per cent to $5.58.

Sky Network Television dropped 0.9 per cent to $4.64. It will pay an early interim dividend ahead of the planned merger with Vodafone New Zealand and raise the cash portion of its acquisition of the telecommunications carrier to reflect a bigger return than their agreement provided for.

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