New Zealand shares were dragged lower as the market's biggest companies, including Meridian Energy, Ryman Healthcare and Auckland International Airport, were among those sold off.
The S&P/NZX 50 Index fell 19.3 points, or 0.2 per cent, to 11,537.68. Within the index, 18 stocks fell, 27 rose, and five were unchanged. Turnover was $106.4 million, down on the $138 million daily average in December.
The local bourse was the only major benchmark index across Asia-Pacific to decline, with global investors upbeat that tense relations between the US and Iran won't deteriorate. Hong Kong's Hang Seng was up 1.1 per cent in afternoon trading, Australia's S&P/ASX 200 Index rose 0.6 per cent and South Korea's Kospi 200 Index gained 1.2 per cent.
Tensions ratcheted up when US President Donald Trump ordered a fatal drone strike on Iranian General Qassem Soleimani last week.But investors have taken it as a good sign that violence hasn't escalated beyond Iran's missile attack on two US military bases in neighbouring Iraq.
"There been a nice recovery in international markets overnight with a little bit more confidence now Iran and Trump seem to have settled down," said Grant Williamson, a director at Hamilton Hindin Greene.