New Zealand shares fell, joining a sell-off across Asia, as the arrest of a Huawei executive reignited fears about US-China trade tensions. Chinese-focused exporter A2 Milk declined.

The S&P/NZX 50 index decreased 23.31 points, or 0.3 per cent, to 8,758.22. Within the index, 25 fell, 16 rose, and nine were unchanged. Turnover was $113.4 million.

Stocks across Asia fell after Huawei chief financial officer Wanzhou Meng - the daughter of founder Ren Zhengfei - was arrested in Canada and faces extradition to the US. The news reversed optimism that the US and China were finding common ground in their protracted dispute after presidents Donald Trump and Xi Jinping agreed to work towards better relations.

"The Huawei news shows how fragile things are towards this trade issue that's dominated markets for a number of months," said Greg Smith, head of research at Fat Prophets.

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A2 Milk fell 2.7 per cent to $10.76 on average volumes; its supplier Synlait Milk was down 0.4 per cent at $9.41.

The news came the same day Fonterra Cooperative Group reported weaker first-quarter earnings and lowered its forecast payout to farmers due to a global oversupply that's weighing on prices. Units in the Fonterra Shareholders' Fund declined 0.2 per cent to $4.70.

Fonterra also said it's investigating a sale of its Tip Top ice cream business, confirmed the end to a joint-venture with Beingmate Baby & Child Food, and said a third asset was under the microscope too.

Smith said it would make sense for Fonterra to carve out Tip Top and list it as a separate entity. It could be sold in tranches and that could help keep it in New Zealand ownership. "There would certainly be an appetite for it."

NZX was much busier than usual with 2.1 million shares changing hands, compared to the 90-day average of 152,000. It was unchanged at $1.02. The stock market operator's monthly metrics showed increased trading activity on-market, although of smaller value.

Auckland International Airport was the busiest stock with a volume of 2.4 million, more than twice its average. It gained 1.6 per cent to $7.21. Kiwi Property Group was also heavily traded on a volume of 2.3 million, up 0.7 per cent at $1.37. Spark New Zealand fell 0.6 per cent to $4.185 on 2.2 million shares.

Of other companies trading on more than one million shares, Meridian Energy decreased 0.2 per cent to $3.30, Argosy Property rose 0.9 per cent to $1.15, Trade Me fell 1.3 per cent to $6.16 and Contact Energy slipped 0.2 per cent to $5.76.

Kathmandu fell 2.9 per cent to $2.65 on very light volumes. The kiwi dollar rose to an eight-month high against the Australian dollar, reducing the value of exports for the retailer which gets more than two-thirds its sales across the Tasman.

Ebos Group, which also has major Australian operations, fell 2.6 per cent to $21.02.

Heartland Group rose 2.7 per cent to $1.51, the biggest gain on the benchmark index, on light volume.

Outside the benchmark index, Energy May rose 13 per cent, or 0.2 cents, to 1.8 cents after shareholders agreed to a reverse listing transaction for payroll software firm PaySauce.