Z Energy, Synlait crash on earnings downgrades

The S&P/NZX 50 Index was 19.82 points, or 0.2 percent, lower at 10,905.06. Within the index, 26 stocks fell, 22 rose, and two were unchanged. Turnover was $121.5 million, of which Z accounted for $17.3 million and Synlait $5 million.

Matt Goodson, managing director at Salt Funds Management, said the market has had a very strong start to September, despite the fact that company earnings haven't matched that optimism.

Z Energy led the market lower after cutting its earnings guidance by $60 million, most of which it blamed on "unprecedented" discounting among petrol retailers, coinciding with the Commerce Commission's market study of the sector. The stock slumped 9.8 percent to an eight-month low $5.68 on a volume of 3 million, more than four times its 90-day average of 619,000. It was the most traded stock today.

"Z Energy really did surprise. They held an investor day quite recently where there wasn't the slightest hint of trouble and yet came out today and informed the market that the chief thing they're seeing is very sharp price competition and also what appears to be difficulties changing over loyalty schemes," Goodson said.