New Zealand shares fell as rising US bond yields trimmed the attraction of the local market's relatively high dividend yields, and prompted investors to crystallise some gains. A2 Milk Co, Air New Zealand and Pushpay Holdings declined.
The S&P/NZX 50 Index dropped 68.33 points, or 0.8 per cent, to 8,364.9. Within the index, 33 stocks fell, 9 rose and 8 were unchanged. Turnover was $140.9 million.
"Investors are starting to come back into the market and they're looking to take a bit of profit off the table," said James Smalley, investment adviser at Hamilton Hindin Greene. "I would still say the market is typified by relatively low volume - we're still waiting for a number of participants who won't be back until next week."
Overnight, the yield on US 10-year Treasuries rose almost 6 basis points to 2.54 per cent, the highest since March last year, as investors cooled on bonds with an upcoming glut of supply coinciding with the Bank of Japan surprising markets by reducing its purchases of long-dated Japanese bonds.
Smalley said US interest rate movements will be a key factor for markets around the world in 2018.
A2 Milk, last year's best performer, led the index lower, dropping 2.9 per cent to $8.10, while Genesis Energy, which traded at dividend yield of 8.7 per cent, dropped 2.8 per cent to $2.42.
National carrier Air New Zealand fell 2.6 per cent to $3.02.
"The oil price has affected that - Brent crude is the highest it has been since 2015," Smalley said. "Air New Zealand has had a pretty strong run, it has been in an absolute sweet spot with tourism and oil being cheap."
Pushpay dipped 1.4 per cent to $4.29. The company exceeded its target of US$100m ($140m) in annualised committed monthly revenue and will move forward its US listing date as it continues to target bigger churches.
"People have done the old 'buy the rumour, sell the fact'," Smalley said. "The thing about market updates is it does provide volume, so if you wish to take profits you might not be able to do that on a normal trading day, but you can today."
Scales Corp was the best performer, up 1.9 per cent to $4.87. Sky Network Television rose 1.1 per cent to $2.83 and Comvita gained 1.1 per cent to $8.69.
Outside the benchmark index, ERoad rose 0.3 per cent to $3.89. It met its unit sales expectations in the third quarter of the 2018 financial year, lifting total contracted units by 17 per cent.
The logistics and fleet management firm said total contracted units, a non-GAAP measure it uses, rose to 69,391 in the three months ended December 31, from 59,538 at the end of September.