New Zealand shares fell, led by companies that have outperformed the index this year, as investors took profits from Heartland Bank and Chorus. Trading was muted ahead of corporate earnings reports later in the week.

The S&P/NZX 50 Index fell 22.33 points or 0.3 per cent to 7,407.61. Within the index, 19 stocks rose, eight were unchanged and 23 fell. Turnover was $127 million.

Heartland Bank led the market lower, shedding 2.8 per cent to $1.74. It has gained 16 per cent so far this year, outperforming the 7.7 per cent increase in the benchmark over the same period. Telecommunications network operator Chorus fell 2 per cent to $4.49, having gained 13 per cent this year.

Peter McIntyre, an investment adviser at Craigs Investment Partners, said investors had opted to take some profit given recent gains. Chorus "has had a particularly good run, ever since its inclusion in the ASX", he said.

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New Zealand Oil & Gas was unchanged at 63c and New Zealand Refining was unchanged at $2.46.

Ryman Healthcare, which reports on Friday, added 0.7 per cent to $8.68 as investors continued to be cheered by plans for a sixth village in Australia. Goodman Property Trust, also due to report later this week, added 0.4 per cent to $1.235.

Fletcher Building fell 2.4 per cent to $8.12 which McIntyre said was surprising after news the crown-owned housing agency, Housing New Zealand, will build a net 17,207 new affordable homes over the next decade. Fletcher Building has been under pressure since unexpectedly weak earnings from its construction division, followed by an earnings downgrade.

Metro Performance Glass, which is also tied to building activity, dropped 2.2 per cent to $1.32.

Methven sank 13 per cent at $1.07 after the company said it expected annual profit would fall by as much as 15 per cent because its investments did not deliver the anticipated growth for the listed shower and tapmaker.

Units in Fonterra Shareholders' Fund were flat at $6 as investors await the results of the overnight dairy auction.

Abano Healthcare Group said it received notice of a counter-claim from Healthcare Partners Holdings seeking to force it to pay the January 2017 interim dividend amount of approximately $523,000. This amount was retained by Abano and set-off against a portion of the unpaid costs in relation to Healthcare Partners' failed hostile partial takeover bid. Abano Healthcare's stock shed 2.2 per cent to $2.35.

Xero led gainers, adding 3.7 per cent to $24.05. McIntyre said investors shrugged off the news that Xero director Craig Winkler, who founded rival accounting software firm MYOB, sold down his stake in the cloud-based software firm as part of a 10-year plan to liquidate assets to fund philanthropic pursuits.

Air New Zealand shrugged off higher oil prices and added 1.8 per cent to $2.80 while Tegel Group pared some recent losses, increasing 0.9 per cent to $1.09.