Surging currency weighs on offshore earners

New Zealand shares fell as the strengthening kiwi dollar weighed on firms exposed to overseas earnings. Gentrack led the market lower.

The S&P/NZX 50 index declined 51.14 points, or 0.5 per cent, to 11,171.80. Within the index, 29 stocks rose, 18 fell, and three were unchanged. Turnover was $238.5 million.

The rising kiwi dollar, which climbed to near US65c yesterday, cut short a week-long rally on the benchmark index as firms that earn foreign currencies fell away. Despite the day’s fall the NZX 50 rose 2.6 per cent in the week.

General manager at CMC Markets NZ, Chris Smith, said the strengthening kiwi had been the big story as it continued to recover against the weakening US dollar.

“We are seeing stocks that are exposed to the US dollar and offshore earnings weaker and local names doing better,” he said.

Gentrack led the market lower, dropping

4.9 per cent to $1.76, trimming a 24 per cent gain over the previous three sessions to 17 per cent. Gentrack has key markets in the United Kingdom and Singapore.

US faith sector donations firm Pushpay Holdings slipped 2.9 per cent to $7.06.

Fisher & Paykel Healthcare fell 2.5 per cent to $28.08 and a2 Milk Co declined 1.8 per cent to $19. These two exporters make up

30 per cent of the index and are exposed to a weaker currency. Global cinema software provider Vista Group International was also weaker, slipping 0.5 per cent to $1.85.

While the index dipped lower, more stocks rose than fell as the bargain hunting fuelled by the promise of economic recovery seen earlier in the week continued.

Kathmandu Holdings posted the largest gain, up 10.9 per cent at $1.22 as investors continued to position for a faster than expected move to alert level 1.

Fuel retailer Z Energy, which has been struggling with weak demand, rose 1 per cent to $3.06.

Air New Zealand rose 8.6 per cent to $1.64, with 9 million shares traded.

Smith said a strong performance overnight from US airline stocks may have spilled over into our market.

Auckland International Airport dropped 2 per cent to $6.96.

Utility stocks had a strong day. Genesis

Energy rose 1.7 per cent to $3, Mercury NZ increased 1.4 per cent to $4.77, Meridian Energy advanced 0.8 per cent to $4.92 and

Contact Energy gained 0.3 per cent at $6.36.

Tourism Holdings rounded out a landmark rally with a small gain, up 0.4 per cent to $2.35. The stock has risen more than 30 per cent this week. SkyCity Entertainment fell 2.4 per cent to $2.88, trimming its gain this week to 16 per cent.