Stockmarket drops on Chinese data
The New Zealand sharemarket dropped this morning, following global markets down on the back of weak Chinese manufacturing figures.
The benchmark NZX 50 Index was down 37.8 points or 0.7 per cent to 4876.3 points shortly after 2pm.
In the first bout of trading 27 companies declined, five gained and 18 remained unchanged.
Craigs Investment Partners adviser Stuart Hardie said global stocks fell after China posted weak economic data.
The Standard & Poor's 500 Index closed down 16.4 points, or 0.9 per cent, at 1828.5 points.
China's manufacturing sector contracted in January, according to the HSBC Markit Chinese Manufacturing Purchasing Managers' Index.
The preliminary index score of 49.6 was down from the final December reading of 50.5 and was below analyst expectations of 50.3.
Hardie said the softer-than-expected economic figures led to a selloff on risky assets across the board.
"The markets have had an OK run since the start of the year," he said, adding the drop was more of a "short-term thing".
"It's not a suddenly the-world's-about-to-end thing."
The drop in the local bourse was natural profit-taking in reaction to overseas data, Hardie said.
This year was looking good for the New Zealand stock market.
Investors would take any excuse to sell down and take some profit after share prices had a good run, he said.
On the NZX 50 retirement village operator Ryman Healthcare led the decliners in morning trade, down 2.5 per cent to trade at $7.85.
Jeweller Michael Hill International was down 2 per cent to $1.41 after the company's half-year results showed the New Zealand portion of the business was lagging.
Michael Hill reported New Zealand first-half sales of A$54.2 million ($57.2m), up 9 per cent on last year, driven by currency translation gains. However, same-store sales were down 4 per cent in New Zealand dollars.
Stockbroking firm Forsyth Barr reduced its recommendations from buy to accumulate.
At the other end, OceanaGold, the miner that operates the Macraes and Reefton goldfields, was up 11.4 per cent to $2.24.
Spot-gold prices surged more than 2 per cent to US$1262 an ounce ($1520) as equities fell following the weak Chinese data.
Hardie said gold worked in reverse of the equities market.
"When things get a bit risk-off you see gold tends to go up," he said.
Fonterra Shareholders' Fund units also gained, up 0.7 per cent to $5.84.