New Zealand shares dipped for a second day in a row yesterday, led lower by A2 Milk Co and Steel & Tube Holdings while Fletcher Building rose on construction expectations.

The S&P/NZX 50 Index dropped 8.48 points, or 0.1 per cent, to 7301.91. Within the index, 25 stocks fell, 14 rose and 12 were unchanged. Turnover was $120 million.

A2 Milk Co was the worst performer on the index, down 3.1 per cent to $1.90. It faces a legal challenge in Australia from rival Lion Group over the science behind health-related claims about the milk. A2 had taken Lion to court over its milk brand's use of A2 protein claims, seeking an injunction and damages.

The market was relatively quiet yesterday ahead of August's results season, Price said, having had a strong run-up over the past month.


Steel & Tube Holdings dropped 2.2 per cent to $2.18 and Trade Me Group fell 1.7 per cent to $5.15.

Trustpower declined 1.2 per cent to $8.10. The electricity generator and retailer said it was "very disappointed" with a Supreme Court ruling dismissing its bid to claim tax deductions on $17.7 million of project costs in a case closely watched by large-scale infrastructure developers.The company previously stated the cost of losing would cut profit by $6.6 million.

Ryman Healthcare dropped 0.9 per cent to $9.65. The country's biggest retirement village operator has bought a 4ha site in Auckland's Hobsonville for a $200 million development.

Fletcher Building rose 1.6 per cent to $9.55, and has gained 28 per cent this year.

"There were a couple of reports out overnight highlighting the increase in work they see this year, and going forward," said David Price, a broker at Forsyth Barr. "The government one was talking about an increase from $31 to $37 billion, quite a big percentage gain, so Fletcher has continued to run on the back of that."

Chorus gained 1.8 per cent to $4.54 and Orion Health Group rose 1.3 per cent to $4.81.

Outside the main index, Allied Farmers shares jumped 16 per cent to 5.2c after the rural services firm gave a rosier view on annual earnings due to a better than expected performance from its livestock division.

Abano Healthcare gained 1.5 per cent to $8.10. The Australasian radiology and dental centre operator turned in an annual profit after selling its half stake in audiology investor Bay International and expanding its dental chain.

"It was at the top end of guidance and there was a nice positive surprise on the dividend front so that stock had a better day, albeit on relatively light volume," Price said.