Investors take profits on top milk stocks

Synlait Milk tumbled 7.4 per cent to $7.27. Photo / Brett Walker

New Zealand shares fell as A2 Milk and Synlait Milk, the best-performing companies on the benchmark index this year, extended their decline amid speculation investors who enjoyed the run-up are now booking profits.

Fisher & Paykel Healthcare rose as the kiwi dollar headed into its third week below US70c.

The S&P/NZX 50 Index declined 3.96 points, or 0.1 per cent, to 8049.67. Within the index, 29 stocks fell, 14 rose, and seven were unchanged. Turnover was $145 million.

The benchmark index has retreated from the record high it reached on October 31 and is now about 1.5 per cent below its peak. Grant Williamson, a director at Hamilton Hindin Greene, said there's "a little bit of nervousness in the market" pending more detail of the new government's policies.

Retirement village operators "were under a bit of pressure" because of the government's intention to lift the minimum wage and cool the property market, he said. Metlifecare fell 0.5 per cent to $5.64, Summerset Group fell 1.5 per cent to $4.67 and Ryman Healthcare, which reports its first-half results on November 23, slipped 0.3 per cent to $9.20.

Synlait fell 7.4 per cent to $7.27 and A2, its infant formula partner, declined 4.5 per cent to $7.62.

The shares have soared 135 per cent and 259 per cent respectively this year.

"There's been a degree of profit taking from investors for a number of days now," Williamson said.

"As the prices slip it could fuel further selling. Both have been overdue for a correction."

It was too early to say whether the decline signalled a change of sentiment toward the companies, he said.

F&P Healthcare is a key beneficiary of a weaker dollar because it makes most of its sales overseas.

The company's share price gained 2.8 per cent to $13.44 and is edging back toward the record $13.49 it reached late last month.

Fletcher Building fell 1.7 per cent to $7.07 and has fallen 32 per cent this year, a period in which it has changed its chief executive and apologised to shareholders after being unable to control cost blow-outs at two major construction projects.

Trustpower fell 1.7 per cent to $5.87, and Ebos Group fell 1.4 per cent to $17.35.

Among gainers, Spark New Zealand rose 2.8 per cent to $3.71, Xero rose 1.9 per cent to $34.70 and Air New Zealand rose 1.5 per cent to $3.37.

Tower fell 2.5 per cent to 78.5c. Suncorp Group-owned Vero Insurance has ditched a planned appeal of a rejected takeover bid for Tower after the New Zealand insurer terminated their arrangement.

Aquaculture producer New Zealand King Salmon Investments rose 3.1 per cent to $2.36.

Evolve Education was unchanged at 78c after the company said it was on track to post a first-half profit of $7m not including a non-recurring expense item of $3m.