New Zealand shares fell, nudging the NZX 50 index from the highest in more than four years, on bets stocks have risen enough to account for any extra stimulus the US Federal Reserve should announce this week. Tower and PGG Wrightson dropped.

The NZX 50 index fell 3.68 points, or 0.1 per cent, to 3786.04. Within the index, 17 stocks rose, 22 fell and 39 were unchanged. Turnover was $105 million.

Investors are betting the Fed will announce a third round of asset purchases as well as extend a pledge to keep interest rates at record low levels. Reserve Bank Governor Alan Bollard kept New Zealand's target rate unchanged yesterday, citing weak growth in trading partner nations and a high kiwi, which is hurting manufacturers.

"The New Zealand markets has had a good run up until today on expectations of improving stimulus from the world's central banks," said Shane Solly, portfolio manager at Mint Asset Management.

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Tower fell 2.7 per cent to $1.80. Chairman Bill Falconer, who was due to retire in February, has stepped down as the insurer considers proposals from other parties following a strategic review aimed at lifting the value of the company.

PGG Wrightson, New Zealand's largest agricultural firm and majority owned by Chinese investor Agria, fell 2.6 per cent to 37c.

"PGG is one of the ones that is being talked about for the next merger and acquisitions story," Solly said.

Fisher & Paykel Appliances continued its rally, gaining 1.3 per cent to $1.18 in the wake of Haier's proposal to buy the 80 per cent of the company it doesn't already own for $1.20 a share. F&P Appliance yesterday hired Grant Samuel as independent adviser, as it prepares its target company statement.

The company's F&P Finance unit may have its credit rating raised one notch to BB+ by Standard & Poor's because a takeover of parent Fisher & Paykel Appliances by Haier is likely to bolster its credit profile.

Vital Healthcare Property Trust shed 1.2 per cent $1.22. The Auckland-based company has bought the land and buildings of Sportsmed, a private hospital in Adelaide, for A$29.2 million.

Westpac Banking fell 0.8 per cent to $30.40, while ANZ shed 0.9 per cent to $30.61.

The decline was led by OceanaGold, down 3.4 per cent to $3.38.

Warehouse, New Zealand's biggest listed retailer, climbed 1 per cent to $2.90, while Kathmandu gained 1.1 per cent to $1.78 ahead of its full-year results next week.

The gainers were led by Air New Zealand, the airline slated for Government sell down, up 2.3 per cent to $1.13.