New Zealand shares fell, joining a decline across Asia, as expectations of a smaller interest rate cut by the US Federal Reserve reduced the attraction of stocks held for a reliable income.

The S&P/NZX 50 Index dropped 67.87 points, or 0.6 per cent, to 10,538.11. Within the index, 31 stocks fell, 10 rose and nine were unchanged. Turnover was $103.5 million.

Stocks across Asia were weaker, with Australia's S&P/ASX Index down 0.2 per cent in afternoon trading. Hong Kong's Hang Seng fell 0.7 per cent and Singapore's Straits Times Index declined 0.3 per cent. Better-than-expected US jobs data last week prompted some analysts to rethink the extent of predicted US rate cuts, and upcoming testimony by Fed chair Jerome Powell this week will be closely watched for any hints on which way the central bank is leaning.

Peter McIntyre, an investment advisor at Craigs Investment Partners, said lower swap rates had weighed on Asian stock markets as investors weigh up the new rate outlook.

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"We've seen in New Zealand that weakness follow through and we got weaker as the day went on," he said. "The potential impact will be hitting some of those yield stocks and infrastructure stocks."

Precinct Properties New Zealand declined 2 per cent to $1.01 on a volume of 1.4 million shares, Genesis Energy fell 1.9 per cent to $3.445, Mercury NZ decreased 1.1 per cent to $4.59 and Infratil was down 1 per cent at $4.655.

McIntyre said port stocks were also weighed down by fears that the US-China trade stoush was spilling over into other trading relationships after an ANZ report yesterday showed log export prices in China slumped after a rapid gain.

Port of Tauranga fell 2.5 per cent to $6.22, while outside the benchmark index, South Port New Zealand was down 2.5 per cent at $6.60. Napier Port is due to lodge its product disclosure statement for an initial public offering next week with a view to listing on the NZX next month. NZX shares were unchanged at $1.12.

Pushpay Holdings led the market lower, down 3.4 per cent at $3.46 on a volume of 313,000 shares. Former chief executive Chris Heaslip recently sold down his stake in the mobile payments software developer.

Z Energy fell 3 per cent to $6.06 on 283,000 shares after the government announced proposals to encourage greater uptake of electric vehicles.

"The Z announcement this morning welcomed the move but the market hasn't liked it at all," McIntyre said.

Sky Network Television was the most traded stock on an unusually large volume of 7.3 million shares. It was unchanged at $1.16. Recent substantial shareholder notices show Australian fund manager Allan Gray has shrunk its investment in the pay-TV operator, whereas Accident Compensation Corp's investment arm has lifted its stake to 6.2 per cent.

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The pay-TV operator has been trading near an all-time low. However, its 2021 bonds, which pay annual interest of 6.25 per cent, last traded at a yield of 3.62 per cent and have dropped 39 basis points over the past 12 months.

Summerset Group's 2025 bonds, paying interest of 4.2 per cent, were the most traded debt security on a volume of 725,000. The notes closed at a yield of 2.98 per cent, down 2 basis points. Summerset shares fell 0.5 per cent to $5.52.

Of stocks trading on volumes of more than a million shares, Auckland International Airport was unchanged at $9.40, Spark New Zealand rose 0.3 per cent to $3.98, Arvida Group slipped 1.5 per cent to $1.33, Fletcher Building dropped 1.9 per cent to $5.06, Kiwi Property Group decreased by 0.3 per cent to $1.61, Meridian Energy was down 0.8 per cent at $4.81, Oceania Healthcare was unchanged at $1.05 and Contact Energy fell 0.6 per cent to $7.80.

Vital Healthcare Property Trust posted the day's biggest gain, up 1.4 per cent at $2.52 on a volume of 205,000 units. Fonterra Shareholders' Fund units increased 1.3 per cent to $3.80 on a volume of 535,000.

Outside the index, TruScreen dropped 3.9 per cent to 12.5 cents when it resumed trading. The cervical cancer test maker raised $1m at 10.6 cents apiece, including $106,000 from chair Anthony Ho. It had been targeting $2m of new funds.

Scott Technology was unchanged at $2.20 after saying it has a strong forward order book, despite restrained investment in Europe.

Turners Automotive was unchanged at $2.28, as was Colonial Motor Co at $8.80, after the Biosecurity New Zealand announced tougher import requirements in an effort to combat the brown marmorated stink bug.

Australia & New Zealand Banking Group fell 1.3 per cent to $28.92 and Westpac Banking Corp was down 0.9 per cent at $29.18 after the Australian Prudential Regulatory Authority said it will require the major Australian banks to lift their total capital requirement by 3 percentage points of risk-weighted assets. The lenders expect to raise tier 2 capital to meet the new requirement. AMP decreased 0.4 per cent to $2.25.

Heartland Group Holdings, which owns licensed local lender Heartland Bank and operates a reverse mortgage business in Australia, fell 1.2 per cent to $1.70.