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Trade Me, Air NZ shares hit turbulence

NZ NewswireNZ Newswire 9/09/2016 Sophie Boot

Air New Zealand dropped 5.3 per cent to $2.045. © Louis Nastro/Reuters Air New Zealand dropped 5.3 per cent to $2.045. New Zealand shares fell for a second day, correcting a market some traders say has become overvalued, with Trade Me Group and Air New Zealand among the biggest decliners.

The S&P/NZX 50 Index dropped 66.14 points, or 0.9 per cent, to 7,468.59. Within the index, 29 stocks fell, 11 rose and 10 were unchanged. Turnover was $122 million.

The benchmark index has gained 19.1 per cent this year and hit a record high of 7,571.1 on Wednesday as investors chase yield in a world of low interest rates.

"We've seen a continuation of profit taking in a number of our stocks, a healthy market does undertake these corrections from time to time," Grant Williamson, director at Hamilton Hindin Greene said.

Trade Me was the worst performer, down 6.7 per cent to $5.45, while Air New Zealand dropped 5.3 per cent to $2.045.

New Zealand Refining fell 4.3 per cent to $2.22, Auckland International Airport was down 3.5 per cent to $7.355, and Ebos Group declined 2.7 per cent to $18.35.

Some of the moves are large, but need to be seen in the context of the gains seen so far this year, Williamson said. Despite today's selling, Trade Me is still up 34.5 per cent this year and Auckland International Airport has gained 32.5 per cent.

The best performer was Steel & Tube Holdings, up 1.3 per cent to $2.31. It has gained 4 per cent since Monday when it was announced it would drop out of the S&P/NZX50 benchmark index on Sept. 16.

Fletcher Building gained 0.7 per cent to $11.10, and is up nearly 50 per cent this year.

Trustpower rose 0.1 per cent to $7.95. The shareholders have overwhelmingly voted to carve out its windfarms and renewable development pipeline, splitting the company into two separate businesses that will be listed on the NZX and ASX.

Outside the main index, Veritas dropped 6.9 per cent to 27 cents.

Wellington Merchants, formerly known as Kirkcaldie & Stains, was unchanged at $3.44.

The directors have recommended its shareholders accept Ron Brierley's latest takeover offer, with the two largest shareholders indicating they will do so.

Brierley's Mercantile NZ has offered $3.45 per share, an uplift from his previous offers of $2.75 and $3 made in March and June respectively.

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