New Zealand shares dropped, led by Stride Property and Warehouse Group, while Xero and Chorus rose.

The S&P/NZX50 Index fell 45.79 points, or 0.6 per cent, to 7,131.3. Within the index, 30 stocks declined, 11 rose and nine were unchanged. Turnover was $120 million.

"We're getting some negative leads from offshore, there's some profit taking going on as people look to lock in some gains," said Grant Davies, investment advisor at Hamilton Hindin Greene.

New Zealand Refining, which gave up rights to a 6 cent dividend, was the worst performer, down 4.6 per cent to $2.51. Stride Property fell 2.9 per cent to $1.67 and Sky Network Television dropped 2.9 per cent to $3.69.

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Warehouse Group fell 2.5 per cent to $2.39. Last Thursday, the retailer reported a 76 per cent drop in first-half profit after it took an impairment charge against its financial services unit, recognised restructuring costs and earned less from its Red Shed department stores.

"Only a few days ago it reported and it wasn't flash - a downgrade in full-year earnings which is slowly flowing through to the share price," Davies said. "It will also go ex-dividend at the end of the month so it's going to be a rough month."

Xero was the best performer, up 1.8 per cent to $19.32. Chorus gained 1 per cent to $4.10 and Vista Group International rose 0.9 per cent to $5.60.

Vector was unchanged at $3.22. It has expanded out its suite of energy services with the acquisition of E-Co Products Group, better known as home ventilation firm HRV, and solar power firm PowerSmart, both for undisclosed sums.

Australia and New Zealand Banking Group dipped 0.2 per cent to $34.65 and Westpac Banking Corp fell 1.2 per cent to $37.69. The two banks have entered into enforceable undertakings to change their practices after the Australian regulator found inappropriate conduct in their wholesale foreign exchange businesses, following peers National Australia Bank and Commonwealth Bank.

Outside the benchmark index, Tower dropped 2.2 per cent to $1.34. ASX-listed insurer Suncorp Group raised the stakes in its takeover tilt for the NZX-listed general insurer, paying an ever larger premium to build its stake to 19.99 per cent. The Australian parent of local insurers Vero Insurance and Asteron Life paid $1.40 a share for 11.3 million shares from Australian fund manager Perpetual yesterday, more than the $1.30 put forward to Tower in an indicative offer, and what it had previously paid to build a 13.3 per cent stake.

"We saw the share price shoot up yesterday, some in the market have taken that to mean they're prepared to pay up to $1.40 for the whole company," Davies said. "Their currently offer stands at $1.30 for the full company, so some people are happy to take that risk off the table - take the proverbial bird in the hand and move on. There's no guarantee that $1.30 offer will proceed as they've got to get approval from the Commerce Commission and the OIO, especially given Suncorp has a powerful position in the New Zealand insurance market already."