11 Jul 2014

Looming reporting season hits shares

7:04 pm on 11 July 2014

New Zealand shares declined on Friday, with the NZX Top 50 Index dropping 27 points to close at 5101.

Hamilton Hinden Green director Grant Williamson said political and currency concerns were creating uncertainty about where the market was headed.

"It has been under a little bit of selling pressure in the last week or two. I think a lot of that has to do with the uncertainty with the general election in September," Mr Williamson said.

As well, the financial reporting season was coming up next month and it was likely investors were "sitting on their hands, waiting to see how these companies are performing".

Mr Williamson also believed the high New Zealand dollar was starting to hurt earnings from a number of companies.

Sky City shares shed 9 cents to $3.72, while Xero shares dropped at 90 cents to $24.75.

In contrast, Kathmandu's rose 9 cents to $3.24.

Kiwi down slightly on US

The Kiwi declined slightly against the US dollar today but remained close to the post-float high of 88.4 US cents.

It was mostly unchanged against the other currencies of the country's major trading partners.

Bancorp Treasury Services client advisor Peter Cavanaugh said the currency remained at elevated levels due to New Zealand's attractive interest rates.

"It's slightly down on the US dollar but that's reflecting a stronger US dollar as the world sort of has a bit of risk aversion," he said.

"But it's pretty well up against the rest. It's defying gravity. It's a case of the attraction of New Zealand's higher interest rates and prospects of even higher interest rates over coming months offsetting any global fears or risk aversion."

Just after 5pm, the New Zealand dollar was buying 88.05 US cents, 93.76 Australian cents, 51.4 pence, 0.6474 euro, 89.16 yen and 5.47 renminbi.