NZ shares drop on Z Energy downgrade

The weakest stock on the index was Z Energy, down 2.7 per cent to $7.30.

New Zealand shares fell, led by Z Energy following an earnings downgrade, with Ryman Healthcare and NZX also declining.

The S&P/NZX50 Index dropped 32.79 points, or 0.4 per cent, to 8,964.1. Within the index, 29 stocks fell, 11 rose and 10 were unchanged. Turnover was $123.3 million.

"The index has had a bit of a soft week, and there's not any one stock that's doing enough to explain today's weakness," said Grant Davies, investment advisor at Hamilton Hindin Greene.

The local benchmark index underperformed its regional peers, with Australia's ASX 200 up 0.7 per cent at 5pm New Zealand time, while China's CSI 300 rose 0.5 per cent and Japan's Nikkei 400 up 0.5 per cent.

The weakest stock on the index was Z Energy, down 2.7 per cent to $7.30. The country's biggest fuel retailer cut full-year earnings guidance by $30m due to an extended shutdown at the Marsden Point oil refinery and high crude prices in the June quarter.

The company is now forecasting operating earnings of $420m to $455m for the year through March 2019, down from previous guidance of $450m to $485m in earnings before interest, tax, depreciation and changes in financial instruments.

In the latest financial year, which ended March 31 2018, Z's net profit rose 16 per cent to $205m on the same basis as the firm benefited from strong jet fuel and diesel demand and ongoing synergy gains from its acquisition.

"Z's margins have been in the news for a while now, and it's maybe an opportune time if they want to head off regulatory action," Davies said.

"The market is not throwing its toys too much. The stock is slightly down this year, it has been pretty stagnant on political threats to margins and this has made them a bit more cautious."

The stock is down 2.2 per cent this year as the government looks more closely at pricing strategy in the fuel sector, with the Commerce Commission set to gain market studies powers by the end of 2018 and the industry top of the list for such an investigation.

Ryman Healthcare dropped 2 per cent to $12.05, NZX fell 1.8 per cent to $1.10, and Gentrack Group declined 1.3 per cent to $6.88.

Chorus was the best performer, rising 1.7 per cent to $4.32. Port of Tauranga gained 1.4 per cent to $5.07 and Kathmandu Holdings advanced 1.3 per cent to $3.11.

Outside the benchmark index, Pyne Gould Corp was unchanged at 30 cents. Its Torchlight Fund has 30 months to make a fixed redemption payment of A$25.5m ($27.7m) after the firm announced a deal with unhappy investors who pursued the distressed asset investor through the Cayman Islands courts.