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Shares fall as Fletcher speculation weighs

NZ Newswire logoNZ Newswire 4 days ago Rebecca Howard

New Zealand stocks fell on Wednesday as Fletcher Building dropped near a year-low with speculation the firm is vulnerable to a corporate raid.

Global equity markets were also subdued with the protracted stand-off between the US and North Korea and weaker-than-expected US company earnings.

The S&P/NZX 50 index declined 15 points, or 0.2 per cent, to 7218.52. Within the index, 29 stocks fell, 13 rose and 8 were unchanged. Turnover was $138 million.

Australia's S&P/ASX 200 index was down 0.5 per cent in afternoon trading while China's Shanghai Stock Exchange Composite Index fell 0.8 per cent after the Dow Jones Industrial Average fell 0.6 per cent on Wall Street.

Geopolitical uncertainty coupled with a disappointing earnings report from Goldman Sachs Group and Johnson & Johnson weighed on sentiment.

"It's a bit of a down day today, following Wall Street and some of the Asian markets. Some of our leading stocks have been hit relatively hard," said Hamilton Hindin Greene Broker Grant Williamson.

On the local bourse, Fletcher Building shed 3 per cent to $7.78, its lowest level in almost a year.

The stock has shed 27 per cent in the year to date, coming under pressure after unexpectedly weak earnings from its construction division followed by an earnings downgrade.

Meanwhile, speculation re-emerged Tuesday about a break-up or buyout of Fletcher Building.

Fisher and Paykel Healthcare, which derives more than half its revenue in the US, lost 0.8 per cent to $9.72 and the exporter may have been impacted after the kiwi currency gained to US70.44c from 70.06c Tuesday.

Outdoor equipment chain Kathmandu Holdings led the index lower, falling 4.5 per cent to $1.92.

In the other direction, Mr Williamson said that investors were still turning to high yielding stock in a nervous market, which was benefiting Contact Energy, up 0.4 per cent to $5.10 and Spark New Zealand, up 1.3 per cent to $3.58.

Units in the Fonterra Shareholders Fund added 0.2 per cent to $6.05 after whole milk powder prices rose by 3.5 per cent in the latest Global Dairy Trade Auction.

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