27 Jan 2014

Shares down in risk-averse market

7:34 pm on 27 January 2014

New Zealand shares have fallen in a risk-averse marekt, with the NZX Top 50 Index shedding 20 points to 4854.

Forsyth Barr investement advisor Anthony Tuck said the New Zealand market took its lead from offshore markets.

"Global markets tumbled around about 2 percent, and that seems to have been driven by fears around slower growth prospects out of China, and also their banking sector," Mr Tuck said.

"There seems to be a global economic shift away from China and other emerging economies and back to the US and European economies, where the growth outlook is a bit more stable."

That could continue to be a theme for 2014, as China tried to develop a more disciplined financial market, he said.

All bluechip stocks such as Telecom, Auckland Airport, SkyCity Casino, Sky TV and Z Energy were all either slightly up or unchanged in what Mr Tuck said was "a real market of risk aversion".

However, "market darlings" Xero, SLI Systems and Wynyard were all down 4 to 6 percent.

Xero shares fell $1.80 to $40, SLI Systems dropped 9 cents to $2.50 and Wynyard sank 19 cents to $2.65.

Little change to dollar

Meanwhile, the New Zealand dollar was little changed after a flurry up to a fresh eight-year high against the Australian dollar in New York on Friday.

Bancorp Treasury Services senior client advisor Peter Cavanaugh said New Zealand's currency had been caught up in global jitters which pushed the currency as high as 95.31 Australian cents.

However, it had been unable to sustain that level and just after 5pm on Monday had slipped back to 94.40 Australian cents - about where it closed on Friday.

"The world went through another dose of, shall we say, emerging market wobbles. We saw some of the peripheral emerging market currencies get sold, and that spread to some of the commodity currencies like the Australian dollar but much less so to the New Zealand dollar," Mr Cavanaugh said.

The New Zealand dollar looked fairly priced against the Australian but appeared to have a cloud forming over it against the rest of the major currencies, Mr Cavanaugh said.

Just after 5pm, it was buying: 82.31 US cents, 49.88 pence, 0.6015 euro and 84.31 yen.