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NZ shares ease in light volume

NZ Newswire logoNZ Newswire 18/01/2017 Sophie Boot

New Zealand shares fell, with volumes still low. Westpac Banking Corp, A2 Milk Co and Tegel Group Holdings all dropped though New Zealand Refining Co gained.

The S&P/NZX 50 Index dipped 3.7 points, or 0.1 per cent, to 7,059.28. Within the index, 26 stocks fell, 17 rose and seven were unchanged. Turnover was $103.3 million.

"There were some mildly negative leads overnight, mainly from Europe," said James Smalley, a director at stockbroker Hamilton Hindin Greene.

"Asia's pretty mixed, it's down but not massive amounts. It's pretty quiet volumes-wise at the moment, even the stocks that have fallen the most have pretty low volumes."

Westpac Banking Corp led the index lower, down 1.8 per cent to $33.80, while Tegel Group Holdings fell 1.5 per cent to $1.36. The poultry producer listed at $1.55 in May last year.

A2 Milk Co dropped 1.7 per cent to $2.27. "It was bouncing back after some selldowns on news from associated businesses, it was getting quite a lot of media talk with Bellamy's," Mr Smalley said.

"They closed at $2.08 about a week and a half ago, had quite a good bounce on the 11th so it may just be a few bargain hunters coming in, that rally seems to have petered off today,"

New Zealand Refining Co was the best performer, up 1.9 per cent to $2.75. The oil refinery operator said its annual throughput hit record levels in 2016 and its fee income for the year was the third largest earned by the company in the past 10 years.

"It's a very good announcement, particularly on margins," Mr Smalley said.

"The increased demand for refining capacity will lead to higher margins - if there's a lot of slack refining capacity your margins are lower. That's what flows through to NZ Refining, they've had a very good November-December, and that's led to it being the best performer today.

"It is a company whose fortunes live and die by those margins, sometimes the south-east Asian refining market can get bounced around but they've obviously had a good couple of months."

Air New Zealand rose 1.6 per cent to $2.24, Ryman Healthcare gained 1.5 per cent to $8.40, and Chorus rose 1.2 per cent to $4.11.

Xero fell 1 per cent to $18.32. The cloud-based accounting software company says it is still considering whether chairman Chris Liddell's position is compatible with his new role as a White House adviser.

Units in Fonterra Shareholders Fund gained 0.6 per cent to $6.25, their highest level since November 2014. Dairy product prices inched higher at the Global Dairy Trade auction overnight, stemming two consecutive declines.

Infratil gained 0.5 per cent to $2.91, a three-month high.

"It's bounced about 11.5 per cent since December when it hit almost two and a half year lows," Mr Smalley said.

"There may be a bit of bargain hunting there, a lot of its investments are doing pretty well".

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