Shares fall as market jitters continue

Midday Update

New Zealand Refining and Vector paced declines on the NZX 50 Index, and the kiwi dollar fell after US Federal Reserve chairman Ben Bernanke said the outlook for the world's biggest economy was "unusually uncertain," sapping investors appetite for risk.

The NZX 50 fell 11.39, or 0.4 percent, to 2992.017 as at midday, heading for its first decline in three days.

The Standard & Poor's 500 Index tumbled 1.3 percent in the wake of Bernanke's comments and in Sydney today, the S&P/ASX 200 Index opened 0.4 percent lower, suggesting equity markets across Asia will be weaker today.

NZ Refining fell 1.6 percent to $3.10.

The nation's only oil refinery said yesterday that its gross refining margin fell to US$3.83 per barrel in May and June, eroding the recovery from last year's slump.

Its ability to process higher-value products was restricted by a plant outage.

Vector, the electricity and gas distributor vying for a piece of the government's broadband rollout, dropped 2.4 percent to $2.06 and Fisher & Paykel Appliances dropped 1.8 percent to 54 cents.

Fisher & Paykel Healthcare, which counts the US as the biggest market for its breathing masks and respirators, declined 1.3 percent to $2.95.

Insured Group, the Australasian insurance company that listing using the shell of Lombard Group, sank 33 percent to 0.2 cents.

The shares traded infrequently.

The New Zealand dollar fell to US71.20 cents from US71.85 cents yesterday and fell to 67.12 on a trade-weighted basis, from 67.60 after Bernanke's downbeat assessment of the US economy in testimony to the Senate Banking Committee rattled equity and currency markets.

Bernanke said central bankers worldwide stand ready to step in and help underpin growth, while playing down the prospects of an exit from the stimulatory conditions that have prevailed, because of the dim economic outlook.

Credit reference and debt collection agency Baycorp said bankruptcies have tumbled by almost two thirds in the first half of 2010 from a year earlier.

There were 1,300 bankruptcies in the first half, based on Baycorp's own records, down from 6,000 in the same period of 2009.

Still, Baycorp said the amount of legal action it has taken to recover debts has risen.

Latest electricity customer number tallies, for June, show a rebound for Contact Energy, which gained more customers than other retailers during month, climbing 1,046 following increased acquisition activity in the upper North Island.

The shares slipped 0.4 percent to $5.68.

Broker Forsyth Barr says it expects flat performance over time from Contact, but is forecasting continuing customer losses by its listed competitor, TrustPower.

Rakon traded unchanged at 93 cents, keeping its year-to-date decline at 21 percent, after the maker of crystal oscillators used in navigation systems and mobile phones announced the acquisition of a French rival.

Rakon is buying Temex for 400,000 euros, gaining access to satellite and space station transport applications to complement its existing European operations, it said today.

Chief executive Brent Robinson said the price paid was at a significant discount to book value.

Quotable Value said house prices rose just 0.1 percent in the first quarter, slowing from a 2.1 percent pace in the final quarter of 2009. From a year earlier, prices rose 6.4 percent.

- BusinessDesk