A2 Milk and Heartland lead slide as caution reigns

The S&P/NZX50 index fell 56.57 points, or 0.7 per cent, to 7762.66.

New Zealand shares dropped, led lower by A2 Milk and Heartland Bank, with Comvita and Scales Corp rising.

The S&P/NZX50 index fell 56.57 points, or 0.7 per cent, to 7762.66. Within the index, 29 stocks fell, 17 rose and four were unchanged. Turnover was $324.2 million.

The latest general election poll, released by Colmar Brunton on Thursday night, showed that a Labour-Greens coalition would have enough seats to govern alone, while a Reid Research poll released on Tuesday had the incumbent National Party leading by 10 percentage points.

"There's obviously a bit of nervousness, with what's happening in North Korea causing some concern and the latest election polls making foreign investors a bit nervous," said Grant Williamson, director at Hamilton Hindin Greene. "Retail investors particularly are being pretty cautious with just over a week to go. Some will be positioning but it's too close to call so what do you do?"

Fisher & Paykel Healthcare had the largest turnover with $38.4 million. The stock ended down 0.8 per cent to $12.85. Other large caps also dropped on busy volume, with A2 Milk Co down 3.6 per cent to $5.70, Heartland Bank falling 3.3 per cent to $1.78, Air New Zealand dropping 2.4 per cent to $3.25 and Spark New Zealand declining 2.1 per cent to $3.80. Williamson said international investors in particular had been selling out of electricity stocks. Meridian Energy gained 0.5 per cent to $2.94 while Mercury fell 1.7 per cent to $3.25.

Ryman Healthcare was down 0.7 per cent to $9.04, while fellow retirement stock Metlifecare was unchanged at $5.82 and Summerset rose 1.2 per cent to $5.16.

"The news of the softening property market is not good for the retirement sector," Williamson said. "First, people sell the house to buy one of the units, so if it gets more difficult to sell it can get more difficult to buy the units. Second, the retirement village companies get the capital gain upside when they buy back the units and they've increased in value over time, so if the market is not improving, there's not so much capital gain to be had."

Comvita was the best performer, up 1.9 per cent to $7.69, while Scales Corp gained 1.7 per cent to $3.52. Outside the benchmark index, AWF Madison Group fell 5.9 per cent to $2.40. The country's biggest contract labour firm said profit in the first half ending September 30 would fall after labour hiring weakened in the second quarter.

New Zealand Oil & Gas was unchanged at 72.5c. Its independent directors have recommended shareholders reject a 72c partial takeover offer from ASX-listed Zeta Resources.