Stock index falls over worries of Brexit

The turbulence hit Air New Zealand which fell 4.4 per cent to $2.08.

Expert notes flight to safety but says NZ market has still got a strong yield.

New Zealand shares fell as fears around the potential for Britain to exit the European Union continued to erode risk appetite. Summerset Group, Air New Zealand and Xero led the decline, while Spark gained.

The S&P/NZX50 Index fell 89.33 points, or 1.3 per cent, to 6834.94.

Within the index, 41 stocks fell, four rose and five were unchanged. Turnover was a modest $153 million.

Equity markets sold off for a second day in Asia, with Japan's Nikkei 225 Index down 1.5 per cent during trading and Australia's S&P/ASX 200 Index down nearly 2 per cent late in the day as that market played catch up after a public holiday.

"There's a flight to safety - gold is up as well," said Greg Smith, head of research at Fat Prophets. "We might be in for a choppy next few weeks."

Still, "if you break it down, it's not so bad," he said. "The NZ market has got that strong yield and property is pretty fully valued. Equities are still quite appealing."

Summerset dropped 5.5 per cent to $4.30. Among other listed retirement village operators, Ryman Healthcare fell 1.8 per cent to $9.29 and Metlifecare fell 1.8 per cent to $5.60.

Air New Zealand fell 4.4 per cent to $2.08 and Xero declined 3.9 per cent to $18.55. Coats Group fell 3.6 per cent to 53c and Orion Health fell 3.2 per cent to $4.60.

Spark, which was sold off after Sky Network Television announced its plan to merge with Vodafone New Zealand, rose 2.4 per cent to $3.405.

"Spark is one of the highest yielding stocks in the market and the reality is we still remain in a low interest rate environment," Smith said. After its recent selloff, the stock had a yield of 7.5 per cent, he said.

Sky TV fell 1.4 per cent to $4.93. Meridian Energy fell 1.5 per cent to $2.56 and Trade Me fell 1.5 per cent to $4.54. TruScreen fell 5.6 per cent to 25.5c after the NZAX-listed cervical cancer test developer widened its annual loss as revenue dropped 21 per cent because of delays in getting a new device certified.

BurgerFuel fell 8.1 per cent to $1.70 after the NZAX-listed fast food chain franchisor said it may ditch its plans to enter the US market and is uncertain of support from backer Franchise Brands.