New Zealand shares fell, led by Trustpower and Kiwi Property Group, while Fletcher Building and a2 Milk gained.

The S&P/NZX 50 Index dropped 29 points, or 0.3 per cent, to 9,298.58. Within the index, 24 stocks fell, 16 rose and 10 were unchanged. Turnover was $131 million.

"Offshore leads were pretty weak, we've seen Asian markets trade lower right across the board and we're faring relatively well," said Peter McIntyre investment adviser at Craigs Investment Partners.

"It's the biggest negative day the US markets have had for a while, the market is starting to get concerned about Treasury yields rising in the US and that interest rate market subtly changing. Share markets don't tend to like rising rates."


In the US overnight, the S&P 500 fell 0.7 per cent, the Dow Jones Index dropped 0.7 per cent, and the NASDAQ 100 fell 0.5 per cent. At 5:15pm New Zealand time, the ASX200 was down 0.8 per cent, Japan's Nikkei 400 had fallen 1.3 per cent, and Hong Kong's Hang Seng was 1 per cent lower.

Trustpower led the index lower, down 3.2 per cent to $5.42. Last week, cornerstone shareholder Tauranga Energy Consumer Trust proposed it ditch customer rebates in five years in favour of funding community projects. TECT only pays the dividend of $400 to $500 a year to Trustpower customers in Tauranga, allowing it to dominate the local market.

Chief executive Vince Hawksworth said last week the company was seeking legal advice on the trust's intention to change its focus.

Kiwi Property fell 2.9 per cent to $1.36 and a2 Milk dropped 2.6 per cent to $8.99.

Fletcher Building was the best performer, up 4.5 per cent to $7.73.

"You're seeing some larger investors looking to top-up or buy, this is a theme going through global markets. Companies which have the potential for pricing power, in an inflationary period, are likely to benefit," McIntyre said.

"Fletcher has had its troubles and they've been well-documented, but they're a very good business. A lot of the bad news is already out in the market and there is potential for surprises to the upside."

Air New Zealand gained 0.9 per cent to $2.97 following a monthly investor update.


"It was fairly strong, domestic and trans-Tasman were strong though long-haul routes were more muted," McIntyre said.

"They're going to report on February 22, and we're expecting a good result based on their updates. They're hedged against recent oil prices, but as you go further out their hedging falls off [past 2019 and 2020] and I think the market is a bit concerned about those rising oil prices. It has been buffeted around recently."

Comvita was unchanged at $9.15. The company said it expects to report a "significant turnaround" in its first-half results, with net profit over $3m, and says it is tracking in line with its full-year guidance after good weather in December and January boosted the honey harvest.