The New Zealand sharemarket continued to drift as investors wait on corporate results and next week's Government Budget while absorbing a2 Milk's latest downgrade.
"The market priced itself pretty firmly into the December, January period but since then there hasn't really been any catalyst to drive the New Zealand market," said Nigel Scott, an advisor at Craigs Investment Partners.
"And when you have a stock like a2 drop like it has, investor confidence always looks over the shoulder."
The S&P NZX50 index closed down 19.8 points, or 0.16 per cent, at 12,639 following soft global markets overnight.
Volume was light with 46.6 million shares traded worth $188.25 million across the main board. There were 111 decliners and 29 gainers.
A2 Milk was sold off for a second day, its shares closing down 43c, or 6.5 per cent, to $6.19. That followed yesterday's 13 per cent fall on the back of a sizeable, albeit expected, fourth earnings downgrade due to problems with its infant formula trade into China.
Scott said investor expectations were tempered without any momentum driving the market.
"Some of the stories of last year - a2 Milk included - are struggling as we head into the middle part of the year when markets tend to go a little bit soft."
Government policy could also be weighing on the market, he said.
"Let's be brutally honest here, we've had the Government pull out some pretty big conversations recently in terms of policy across housing, health and the labour market. Perhaps that is giving a little bit of a steer to maybe make the offshore investors have little bit less confidence about New Zealand."
Meridian Energy was the best performer among the larger cap stocks, climbing 12c, or 2.26 per cent, to $5.44. That followed the company's investor day which focused on future dry year solutions, the response to Rio Tinto's exit from Tiwai and future decarbonisation. In its presentation the company hinted at pursuing large-scale demand stimulation projects and a new strategic direction in Australia.
Auckland International Airport rose 16c, or 2.13 per cent, to $7.68 while Air New Zealand dipped 1.5c to $1.66.
Pushpay fell 9c, or 5.29 per cent ahead of its annual result. Analysts are split on the effect new competition may have on the digital giving and church management software company.
There has been a general pull-back of technology stocks recently with some rotation into other sectors globally.
Cannasouth shares fell 1c to 40c despite the company issuing a progress report on its cultivation facility in the Waikato, saying construction was now complete and workers are now installing equipment and greenhouse air handling units.
Harmoney fell further following yesterday's 12 per cent fall and was down 7c, or 3.9 per cent, at $1.73. My Food Bag, another to struggle after a recent IPO, fell 4c, or 2.68 per cent, to $1.45 as its maiden result draws nearer.
Construction and building company Fletcher Building dipped 5c, or 0.67 per cent, to $7.40. Shareholders will be watching with interest news across the Tasman of Kerry Stokes' Seven Group's takeover offer for resurgent building materials giant Boral.
Seven pitched its opening bid at A$6.50 a share for all of Boral, valuing the building materials group's equity at about $8 billion, to which the target company promptly rejected, describing it as an opportunistic bid that undervalues the company.