Air NZ, Xero lead stocks down while bank hits record

Air New Zealand peaked at $3.60 at the beginning of September. Photo / Peter Meecham

New Zealand shares fell, led lower by Air New Zealand and Xero, while Heartland Bank hit a record high.

The S&P/NZX50 index dropped 46.66 points, or 0.6 per cent, to 7974.43. Within the index, 27 stocks fell, 17 rose and six were unchanged. Turnover was $122 million.

Air New Zealand led the index lower, dropping 4.2 per cent to $3.18. The stock has gained 51 per cent this year, peaking at $3.60 at the beginning of September, but has dropped back in the past two months.

"There are concerns about the currency and oil prices are starting to weigh on them a little bit," said James Smalley, senior adviser at Hamilton Hindin Greene. "A few investors who bought in a year ago may be thinking the real sweet spot is over, so it's time to take some money off the table."

Xero dropped 3.9 per cent to $32.10. The stock was the worst performer on the index on Thursday after it announced it will delist from the NZX in favour of the ASX, and has shed 7.2 per cent since then.

"There might well be people just re-weighting their portfolios. Obviously its de-listing is still a wee way away in February but index tracker funds can't hold the stock any more," Smalley said.

A2 Milk dropped 2.1 per cent to $7.41. The stock has shed 12 per cent in the past week and is down 15 per cent from the record $8.75 it reached on October 30. It has gained 255 per cent this year, making it the best performer on the index.

"There has been a reasonably sustained bout of profit-taking after one of the more meteoric rises we've seen in recent years. It's not exactly unexpected," Smalley said. "Investors are waiting to see if the earnings justify the price. There's still a lot of good news priced in."

Heartland Bank was the best performer, up 1 per cent to $1.97, a record for the stock which has gained 30 per cent this year.

"It has been a quiet achiever over the past two to three years," Smalley said. "Investors who participated quite early at 50-odd cents will have done exceptionally well, particularly in contrast to the major banks - it has blown them out of the water."

Westpac Banking Corp gained 0.8 per cent to $36.91 and Metlifecare rose 0.7 per cent to $5.66.

Infratil gained 0.6 per cent to $3.215. It lifted first-half profit 16 per cent.

Outside the benchmark index, Vista Group International was unchanged at $5.35. It plans to double its shares on issue via a two-for-one split.

Bethunes Investments rose 5.6 per cent to 1.9c. It narrowed its first-half loss after benefitting from a break fee when NZ Retail Property Group terminated a proposed reverse listing transaction.