MARKET CLOSE: NZ shares fall; Spark falls; Meridian, MRP heavily traded on MSCI changes

New Zealand shares fell, paced by Spark New Zealand and Fisher & Paykel Healthcare as investor looked to crystalise recent gains. Merdian Energy, MightyRiverPower, Genesis Energy and Xero were heavily traded as their inclusion into global MSCI Indices came into effect.

The NZX 50 Index fell 29.005 points, or 0.5 percent, to 5442.678. Within the index, 22 stocks fell, 23 rose and five were unchanged. Turnover was a $726 million, almost seven times the daily average for October, boosted by the MSCI review.

The benchmark index has advanced some 15 percent since the start of the year, boosted in part by investors' appetite for yield in a low interest rate environment. Traders looked to book some of those recent gains.

Spark New Zealand, formerly Telecom Corp, dropped 2.9 percent to $3.07 and has gained 37 percent since the start of the year. Fisher & Paykel Healthcare declined 0.4 percent to $5.60 and has climbed 46 percent since the start of the year.

"We're seeing the New Zealand market a little bit weaker after a phenomenally strong run relative to other global markets," said Shane Solly, director at Harbour Asset Management. "We have outperformed other markets and we probably look a little bit fully priced."

A review of the global indices by MSCI has come into effect today. Investors who follow the indices must hold a certain amount of the stock. The semi-annual review of the MSCI Equity Indexes saw stocks which were exiting or joining the indices traded heavily and the NZX extend settlement by 20 minutes, Solly said.

MightyRiverPower rose 0.3 percent to $2.97 as $180 million worth of shares changed hands as it join the MSCI Global Standard Index. Meridian Energy was unchanged at $1.69, with $183 million changing hands as it followed MRP into the index. Meanwhile, Xero, the cloud-based accounting software firm, slipped 0.3 percent to $17, with $100 million of stock traded, as it departed the standard index, to join the small cap. Genesis Energy dropped 1.2 percent to $2.10, with $24 million changing hands, also debuted in the small cap index.

Heartland Bank, the banking subsidiary of NZX-listed Heartland New Zealand, was unchanged at $1.10 after it reported a 13 percent increase in profit to $9.8 million in the three months to Sept. 30 on an increase in interest income while borrowing costs fell.

Chorus, the regulated telecommunications network operator, fell 2 percent to $2 after it said it expects cheaper costs for the roll-out of its ultrafast broadband network in the current financial year after cutting new deals with its contracts.

Auckland International Airport led the benchmark index lower, dropping 3.5 percent to $3.84.

Infratil, the infrastructure investors, was the best performer on the day, advancing 3.9 percent to $3.18.

Outside the benchmark index, Pumpkin Patch tumbled 13 percent to a record low of 29.5 cents after chair Peter Schuyt said trading conditions remain challenging and the unprofitable childrenswear retailer is in risk of breaching its banking covenants if Christmas sales disappoint. The retailer has hired Goldman Sach's to assist in a review of its capital structure.

"It is an appropriate thing for the company to say if they are potentially at risk of breaching they should disclose that to investors," Solly said. "It's a broad ranging review, and there's lots of different things they could be doing."

Green Cross Health, formerly known as PharmacyBrands, was unchanged at $2.08 after it posted a 2 percent decline in first-half profit to $6.9 million as higher wage and lease costs offset a pickup in sales.

ERoad rose 1.4 percent to $4.25 after the logistics and fleet management company is on track to meet its prospectus full-year forecasts after reporting a first-half loss of $1.9 million, while boosting sales 82 percent to $7.9 million, and flagged potential upside, saying the Oregon market may be bigger than first thought.

Abano Healthcare declined 1.2 percent to $7.20 after it said first-half profit may rise 40 percent even in the face of a weak Australian dollar and tepid economic growth across the Tasman. The medical investor has agreed to sell its orthotics business, The Orthotic Centre, to private investors, and will take a small loss on the sale against its 2015 results.

Cavalier Corp slumped 11 percent to a more than 20-year low of 58 cents after chairman Alan James has defended his two-decade tenure as head of the carpet maker's board as shareholders questioned its poor financial performance, suspension of dividends and the 62 percent drop in its share price since the start of the year.