New Zealand shares fell, led lower by Chorus, after investors were spooked by potentially stricter regulation of its ultrafast broadband network than they'd anticipated.

The S&P/NZX 50 Index decreased 18.06 points, or 0.2 per cent, to 10,216.09. Within the index, 23 stocks fell, 21 rose, and six were unchanged. Turnover was $120.1 million.

Chorus dropped 5.8 per cent to $5.87 on a volume of 690,000 shares, more than its 90-day average of 526,000. The network operator has gained 45 per cent over the past 12 months, the third-best performance on the NZX50, supported by a new regulatory regime seen as giving it greater scope to pay more in dividends.

Its 2028 bonds paying annual interest of 4.35 per cent were the most traded debt security today. They closed at an unchanged yield of 3.4 per cent on a volume of 1 million notes.

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The Commerce Commission today issued several papers seeking feedback on the new regime for fibre networks, including its current thinking on key issues such as the cost of capital and what's included in Chorus's regulated asset base.

"Aspects of that, particularly around the rate of return that Chorus may be allowed to earn, were a little below more bullish expectations in the market," said Matt Goodson, managing director at Salt Funds Management.

"It's still relatively early days, and, ultimately, with the advent of 5G, competition may determine the price rather than the regulated outcome anyway."

Spark New Zealand, the network operator's biggest customer, rose 0.4 percent to $3.825 on 6 million shares, the most traded stock in the benchmark index. Spark's 2023 bonds, paying interest of 4.51 per cent, closed at a yield of 2.41 per cent, down 8 basis points, on a volume of 400,000 notes.

Of other stocks trading on volumes of more than a million shares, SkyCity Entertainment fell 1.6 per cent to $3.82, Kiwi Property Group declined 0.7 per cent to $1.53, Meridian Energy increased 0.8 per cent to $4.40, and Contact Energy advanced 0.6 per cent to $7.34.

Synlait Milk slipped 1.9 per cent to $9.76 on a smaller than usual volume of 69,000 shares. The milk processor received a cease and desist notice over the construction of its second processing plant in Pokeno. The Court of Appeal this month ruled the land is subject to covenants restricting its use, and Synlait hopes to find a practical solution with its neighbour.

A2 Milk, which counts Synlait as a supplier, fell 0.7 per cent to $16.14 on a volume of 644,000 shares, less than its 90-day average of 786,000.

Investore Property was unchanged at $1.68 on 841,000 shares, more than its 135,000 average. The large-format retail property investor posted a 16 percent decline in annual profit, due to smaller gains on its property portfolio, while underlying earnings rose 2 percent. The annual dividend of 7.6 cents per share was up from 7.46 cents a year earlier.

Stride Property, which manages Investore, rose 1 per cent to $2.09 on a volume of 759,000, more than three times its 225,000 average.

Ryman Healthcare, which reports its annual earnings on Friday, posted the biggest increase on the benchmark index, up 2.9 per cent at $11.87.

Dual-listed Australian banks rose for a second day after the Australian Prudential Regulation Authority proposed lowering the rates used to calculate whether a stressed borrower can meet their repayments. The banks jumped yesterday after the Liberal-National coalition election victory removed the threat of regulation by a Labor administration.

Westpac Banking Corp was up 2.4 per cent at $29.94 and Australia & New Zealand Banking Group rose 1.2 per cent to $29.70.

Outside the benchmark index, Plexure Group jumped 15 percent to 62 cents after reporting a 44 per cent increase in revenue and a net operating cash inflow. The mobile advertising firm more than halved its annual loss, weighed down by an unrealised fair value expense when holders of a convertible note exchanged that debt for equity.

Tower rose 2.6 per cent to 80 cents on a volume of 1.2 million shares, more than its 281,000 average. The insurer returned to profit in its first-half earnings result and lifted annual guidance on increased gross written premium and a reduction in claims costs.

Goodson said the underlying result was extremely good, with the only negative being an increase in claims over the Earthquake Commission's cap.

Steel & Tube Holdings fell for a second day, down 3.7 per cent at $1.03 on a volume of 1.4 million, compared to its 194,000 average. Goodson said Salt Funds was a vocal supporter of Fletcher Building's $1.90 per share takeover bid last year, and that the downgrade this week vindicated that stance.

Fletcher declined 0.4 per cent to $5.18, while Metro Performance Glass, which reports earnings on Thursday, rose 1.3 per cent to 40 cents.

Infratil shares resume trading tomorrow after being halted at $4.45 for the institutional component of its $400 million equity raise to fund its share of the $3.4 billion Vodafone New Zealand acquisition.