A2 Milk takes froth off market, but building stocks gain

The S&P/NZX 50 Index dropped 72.21 points, or 0.9 per cent, to 7639.51.

New Zealand shares fell as A2 Milk gave up some of its recent gains, while building stocks Fletcher Building and Metro Performance Glass rose.

The S&P/NZX 50 Index dropped 72.21 points, or 0.9 per cent, to 7639.51. Within the index, 33 stocks dropped, 11 rose and six were unchanged. Turnover was $159 million.

"It has been a healthy correction; it was a pretty rough old day but apart from some pockets of volume, the market is pretty quiet," said David Price, broker at Forsyth Barr. "We're in confession season, next week is the last of it; if there's going to be anything, next week is it."

A2 Milk was the worst performer, down 5.3 per cent to $4.28. The stock soared this week, to a record $4.52 on Thursday amid positive sentiment about its upcoming results. Despite today's fall, it has still gained 10 per cent in the week.

Trade Me fell 1.5 per cent to $5.42, Genesis Energy dropped 2.4 per cent to $2.43 and Auckland International Airport declined 2.2 per cent to $6.80.

Fletcher Building rose 0.8 per cent to $7.90. Shares plunged as low as $7.48 last week after the building company downgraded its earnings expectations for the second time, but have been recovering over the past few sessions.

"There's been inspired buying out of Australia. People look at it on a multiple basis and it's cheap versus an expensive market, and versus Aussie peers, that's where the re-rating has come from," Price said. "That whole sector has been downgraded at a time of expansion - Metro, Steel & Tube, Fletcher Building, Methven, they've all been the same."

Metro Performance Glass was the best performer, up 3.3 per cent to $1.55, while Vital Healthcare Property Trust rose 1.4 per cent to $2.25. Outside the benchmark index, Methven rose 1.8 per cent to $1.13 and Steel & Tube Holdings dropped 1.8 per cent to $2.24.

Blis Technologies dropped 3 per cent to 3.2c. The Dunedin-based company expects to post a maiden profit in the current financial year as it says it is positioned for sustainable, profitable growth in a rapidly expanding market.

"During this financial year, the company will continue to invest in growth initiatives, delivering increased turnover and a profit," chief executive Brian Watson said in notes prepared for delivery at the annual general meeting in Dunedin today.

Blis had forecast a profit for the 2017 financial year but warned the market in February that pre-tax profit wasn't going to meet the $700,000 forecast. The stock has shed 35 per cent over the past year.