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Stocks fall over investor election fears

NZ Newswire logoNZ Newswire 2/11/2016 Sophie Boot

Stocks fall over investor election fears © Hagen Hopkins/Getty Images Stocks fall over investor election fears New Zealand shares dropped over a per cent as investors felt pre-US election jitters, with Tilt Renewables, Orion Health Group and Trade Me Group leading the index lower.

The S&P/NZX50 Index dropped 76.75 points, or 1.1 per cent, to 6,853.74. Within the index, 29 stocks fell, 12 rose and 10 were unchanged. Turnover was $150.3 million.

"There's pretty broad selling, and it's all pre-election risk-off in heightened uncertainty," said Daniel Metcalfe, senior investment advisor at OMF.

"The market's had a pretty good run over the last few years, and this is one of the most interesting and fearful events we've had to deal with for a while. The volatility index in the US has increased quite significantly, it's spiked up having been quiet for some time. Spreads have widened significantly, which is a sign of people's fear right now."

Tilt Renewables, the windfarm operator carved out of Trustpower, was the worst performer on the index, down 4.6 per cent to $2.10, while Ryman Healthcare dropped 3.8 per cent to $8.56.

Orion Health Group hit an eight-month low, falling 3.8 per cent to $3.07.

"They've really been an underperformer - since the IPO, they started off winning some contracts earlier in the year and turned around market expectations, but they've been taking a lot longer to deliver the goods that everyone might want them to. The risk-off is exaggerated in those pure growth stories," Metcalfe said.

Trade Me Group dropped 3.3 per cent to $4.65, which Metcalfe said was due to Facebook's increased online marketplace offering.

New Zealand Refining Co was the best performer, up 4 per cent to $2.34. Freightways gained 1.3 per cent to $6.45 and Genesis Energy advanced 1 per cent to $1.94.

SkyCity resumed its falls from last week, down 1 per cent to $3.81.

Outside the benchmark index, Cavalier Corp shed 18 per cent to 64 cents. The carpet maker said 2017 earnings may fall as much as 52 per cent to between $3m to $5m in the year ending June 30, 2017, from $6.3m a year earlier, as it incurs one-time costs to consolidate its manufacturing operations.

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