NZ shares fall, taking lead from overseas

NEW Zealand's benchmark share index has dropped 0.7 per cent, amid "negative sentiment from the overseas bourses".

NEW Zealand shares have dropped, as investors took their lead from overseas bourses which sold off on concern about a possible US-led military strike against the Syrian government.

With investors favouring safe haven assets such as gold, the NZX 50 Index declined 32.309 points or 0.7 per cent to 4,509.716 on Wednesday.

Within the index, 27 stocks fell, 16 rose and seven were unchanged. Turnover was $114.9 million.

"It's difficult to avoid the negative sentiment from the overseas bourses, and our market has moved lower," said Bryon Burke, head equities dealer at Craigs Investment Partners.

"Overall the market is fairly quiet, it is not an aggressive sell-off by any stretch of the imagination, just a down day."

Telecom, which is the second-largest stock on the benchmark index, slid 1.8 per cent to $2.20 on order flow from overseas investors, Mr Burke said.

Mighty River Power, the energy company that went public in May after the government sold half its stake, initially rallied but ended the day down 0.9 per cent to $2.17.

The company stoked optimism it will beat its prospectus forecast for shareholder returns in 2014 after finishing the 2013 year ahead of expectations.

"It is unfortunate they had their announcement on a day when there is a bit of selling around," Mr Burke said.

"Their price did rally following the announcement but now it is down, despite the announcement being pretty solid. It rallied in the morning and then as Australia opened and Asian markets opened lower, a little bit of selling came across here and along with them, other shares were sold down as well."

Tenon, the wood mouldings company controlled by former Fletcher Challenge unit Rubicon, gained 3.7 per cent to $1.40 after the company said it returned to operating profit as the US housing market regathered momentum, and wants to more than double earnings in the coming financial year.

Abano Healthcare, the specialist health clinic investor facing a potential takeover tilt, slid 1.7 per cent to $6.40 after the company said it wants to raise up to $18.5m at an 8.6 per cent discount in a share purchase plan and placement.