New Zealand shares fell, led by A2 Milk Co, after one of the company's directors sold a small parcel of shares. Fletcher Building declined after surprising investors with a takeover bid for Steel & Tube Holdings.

The S&P/NZX 50 index dropped 32.64 points, or 0.4 per cent, to 9,293.95. Within the index, 24 stocks fell, 19 gained and seven were unchanged. Turnover was $136 million.

A2 led the market lower, falling 2.6 per cent to $11.08 after disclosing director Peter Hinton sold 25,000 shares at $11.91 apiece on September 26. The sale came in the wake of CEO Jayne Hrdlicka's share sale, which investors have criticised as being poorly communicated.

"It's a relatively immaterial percentage of his holdings, but it doesn't come out as particularly good coming after CEO Hrdlicka sold all of her shares," said James Lindsay, a senior portfolio manager at Nikko Asset Management.

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Today's disclosure comes after Morningstar Research included the stock in its top 10 stock ideas for Australia and New Zealand. It said the recent price decline meant A2 stock was trading at a discount to the analyst's $14.60 fair value estimate.

Fletcher dropped 1.5 per cent to $6.48 after its initial bid for steel products maker Steel & Tube was turned down as too low. Fletcher offered $1.70 a share, or $284m, and has the support of shareholders with 20 per cent of the company's stock. CEO Ross Taylor says he will keep pursuing the company, but was coy on whether he'll raise the bid.

Lindsay said the takeover bid was a surprise with other firms seen as more likely targets.

"The market was quite surprised that they would look to spend quite a lot of their capacity in bidding for Steel & Tube," he said.

Steel & Tube, which is outside the top 50, climbed 16 per cent to $1.56, still below the non-binding offer.

NZX fell 0.9 per cent to $1.08. The stock market operator is facing a dissident shareholder unhappy with its strategy. However metrics today showed it's getting more trading done through the official market. And it could attract a new listing with Hawke's Bay Regional Council recommending a partial sale and listing of Napier Port.

Port of Tauranga was unchanged at $5.16 and logistics firm Mainfreight gained 0.2 per cent to $30.21. Scales Corp, which has orchards in Hawke's Bay, rose 0.6 per cent to $4.93.

Pushpay Holdings posted the biggest gain for the day, up 1.3 per cent to $4.05. The payments software developer yesterday disclosed Morgan Stanley ceased being a substantial shareholder on September 27.

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Air New Zealand gained 1.2 per cent to $3.025 and Investore Property increased 0.7 per cent to $1.55.

Among blue-chip stocks, Spark New Zealand increased 0.5 per cent to $4.04, Auckland International Airport advanced 0.3 per cent to $7.32, Fisher & Paykel Healthcare slipped 0.1 per cent to $15.10 and Meridian Energy decreased 0.2 per cent to $3.25.

Fonterra Shareholders' Fund units declined 0.8 per cent to $4.81 after dairy prices fell at the latest GlobalDairyTrade auction.

Outside the benchmark index, Briscoe Group slipped 2 per cent, or 7 cents, to $3.52 after shedding rights to an 8 cent per share dividend. Warehouse Group gained 0.5 per cent to $2.08 after appointing local Facebook chief Will Easton to its board.