New Zealand shares continued to decline in the wake of data suggesting the US economy is slowing and after the US threatened to open another front in its trade war, this time with Europe.

The benchmark S&P/NZX 50 Index fell 130.43 points, or 1.2 percent, to 10,821.21. Within the index, 38 stocks fell, eight rose and four were unchanged. Turnover was $107.8 million.

The broad measure of US stocks, the S&P 500 Index, shed nearly 1.8 percent overnight and most markets in Asia are down today.

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The New Zealand market held up well by comparison with others and trading volumes were light, says David Price, a broker at Forsyth Barr.

"It's not a bad performance. On a relative basis, we've done pretty well," Price says.

Recent US data has shown manufacturing contracting and weak jobs growth believed to be caused by the country's trade war with China.

The World Trade Organisation has ruled the US can impose tariffs on the European Union because of illegal subsidies the EU gave to Airbus to help it compete against American rival Boeing.

President Donald Trump is now planning to impose tariffs on US$7.5 billion of European imports ranging from cheese to large aircraft from Oct. 18.

The new tariffs come as US and Chinese negotiators are about to sit down together next week to see if they can reach a deal on their trade differences.

Skellerup was the worst performer within the top 50 index, falling 11 cents, or 4.9 percent, to $2.16. Price says much of the decline was because it shed its 7.5 cents per share dividend today.

Other poor performers included Gentrack, down 20 cents, or 4 percent, to $4.80, and Vista Group, down 15 cents, or 4 percent, to $3.60. Both had been high-flyers but have recently disappointed and downgraded earnings.

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"When you have high-multiple stocks, people start extrapolating the growth trajectory and when you don't get it, they get hammered," Price says.

Vista was the third most traded stock today with 1.24 million shares changing hands.

Fletcher Building was another of the day's poor performers, sinking 18 cents, or 3.6 percent, to $4.84, as was Fisher & Paykel Healthcare, which shed 51 cents, or 2.9 percent, to $16.94.

While Fletcher has a poor track record, Fisher & Paykel is one of the market's high-flyers. However, the latter is very exposed to world growth since more than 95 percent of its healthcare products are exported.

The most-traded stock today was Auckland International Airport, which fell 22.5 cents to $9.10 with almost 2.35 million shares traded. Its heavy exposure to tourism means its performance is likely to suffer from slowing world growth.

Surprisingly, the Fonterra Shareholders Fund was the day's best performer, gaining 15 cents, or 4.3 percent, to $3.66.

But its gains are more in the nature of a relief rally because some had expected a worse result than the $557 million net loss the dairy co-operative reported last week.

Today's gain should also be seen in the context of the fund's unit price tumbling about 28 percent in the past 12 months while the main index has risen more than 17 percent.

"We know that the cream always rises to the top, and there's Fonterra leading the charge," Price says with heavy irony. "Every dog has its day."

Rising stocks today tended to be those prized for their reliable dividend streams such as Precinct Properties, which rose 2 cents, or 1.1 percent, to $1.82. Contact Energy rose 1 cent to $8.54.

"We're now talking 100 percent chance of another rate cut before Christmas," Price says.

The Reserve Bank has already cut its official cash rate to a record low of 1 percent and every time it cuts, it depresses returns from investments such as bank term deposits. That makes yields from property stocks and utilities such as Precinct and Contact that much more attractive.

Precinct shares have gained about 26 percent in the past 12 months while Contact shares have risen 45 percent.