"Fonterra has talked a lot of good stories, and they're struggling to deliver - it has been a very tough year for them, they've had to settle with Danone and had a poor experience with Beingmate, all in an environment where the GlobalDairyTrade auction price has increased rapidly in the second half," he said.
A2 Milk dropped 4.4 per cent to $10.24. The stock has fallen 22 per cent since last week, when it reported a 70 per cent increase in revenue for the nine months to March 31.
"A2 disappointed because the market had very high expectations," Ward said. "Though they're growing at 70 percent, with any company that has a track record of underpromising and overdelivering people start to price in over-delivering, and when they don't do that, naturally you're starting to get an unwind."
"It has to earn back that justification to be rewarded for earnings yet to be obtained. You've got MSCI buying and the share price weakening, so it can only be people reflecting on a growth company that hasn't delivered the growth they expected," Ward said.
Auckland International Airport fell 2.4 per cent to $6.59 and Comvita dropped 2.3 per cent to $5.93.
Argosy Property was the best performer, up 2.5 per cent to $1.045. It lifted annual earnings 2.1 per cent on flat rental income and said it will cut its retail exposure over the next 18 months, with real estate selling at "attractive prices" and the market near a cyclical peak.
Sky Network Television rose 1.7 per cent to $2.39, Metlifecare gained 1.7 per cent to $6, and Chorus advanced 1.6 per cent to $4.12.
Outside the benchmark index, Steel & Tube plunged 18.2 per cent to $1.62, the lowest it has closed since May 2001. It expects to post a loss before interest and tax (ebit) of about $38m this financial year, from positive ebit of $31.1m a year earlier, and breach its banking covenants after a restructuring that will see it exit its plastics business and write down the value of its assets.
It said normalised ebit would be about $16m, excluding non-trading costs and impairments of up to $54m. On a conference call this morning, chief executive Mark Malpass said shareholders could "absolutely" expect a return to profitability in the next financial year.
"When you have downgrades, naturally people start to second-guess themselves, and you can have an overreaction," Ward said. "You have to re-earn investor confidence when you disappoint, and the more often you disappoint, the less likely people are going to give you credit for what you say."
Serko dropped 8.7 per cent to $2.74. The online travel booking software developer reported a maiden annual profit ahead of an expansion into the Northern Hemisphere and a planned ASX listing next month.
