New Zealand shares fell, pushing the benchmark NZX 50 Index to the lowest level in a month, as investors drove down Fletcher Building in the wake of its earnings downgrade last week.
The NZX 50 fell 37.85, or 1.1%, to 3279.10. Within the index, 27 stocks fell, six rose and 17 were unchanged. Turnover was a lower-than-average $77.1 million.
Equities markets fell in Europe and the US overnight, setting a negative tone for the local market, after Germany's finance minister played down the prospects of a breakthrough on Europe's debt crisis at this weekend's European summit.
Fletcher sank 5.8% to $6.30, the lowest since May 2009, bringing its tumble since last week's reduced guidance to 20%. On October 12, the nation's biggest construction company said profit in the six months to December 31 will fall about 10% and annual earnings, excluding one-time items, won't grow.
Still, it is rated 'outperform' based on the consensus of analysts polled by Reuters, with a price target of $8.50.
"There's a reasonable amount of foreign selling in the stock," said Grant Williamson, a director at brokerage Hamilton Hindin Greene.
Delays in the Christchurch rebuild after the earthquakes is having "a pretty serious impact on slowing things down" and in both New Zealand and Australia, construction and building are "very sluggish."
Among other major stocks, Contact Energy fell 1.8% to $5.63.
Fisher & Paykel Appliances rose 1.1% to 47 cents, the biggest percentage gain on the index.
Australia's Telstra rose 1% to $4.04 and was the second-biggest gainer on the NZX. Its shareholders today approved splitting the company, which told them it would maintain dividends for the 2012-2013 year. The stock has a dividend yield of almost 13% based on its most recent payments.
"That puts the stock down as an extremely good yield investment," Williamson said.
GuocoLeisure, the company once known as Brierley Investments, was unchanged at 60 cents on a day it reported a 44 percent jump in first-quarter profit as higher oil and gas prices boosted its Bass Strait royalties and it gained from the settlement of a royalty dispute.
Net profit rose to US$24.1 million, or 1.8 cents a share, from US$16.7 million, or 1.3 cents a year earlier, the Singapore-based company said in a statement today. The company shed its final dividend of 2 cents a share today.
Turners & Growers was unchanged at $1.17 after the fruit and vegetable packer said it was backing off its challenge to the kiwifruit export monopoly of Zespri because of the "severe pressure" the industry is under from the bacterial disease PSA.
The company said it will not go ahead with an appeal against last year's High Court decision due to be held on November 1. The High Court had upheld the regulations giving Zespri its kiwifruit export monopoly.
Turners & Growers said the appeal related to the first part of an action against Zespri launched in 2009. It will continue with its appeal on the second part of its action relating to claims under the Commerce Act. A date for that appeal is yet to be set.
Wellington Drive Technologies, the energy-efficient motor company that is restructuring to reduce costs and working capital, and focus on its refrigeration business., fell 15% to 17 cents.
The company yesterday named Greg Allen as new chief executive and said the ex-pat kiwi will be based in North America to be closer to customers.