New Zealand shares fell in a late flurry of activity as investors digested the quarterly rebalancing of the S&P/NZX and FTSE Russell indices tracked by passive investment funds.

The S&P/NZX 50 index dropped 89.42 points,
or 0.8%, to 11,682.39, taking its weekly decline to 1.5%. Across the main board, 67 stocks fell, 65 rose and 49 were unchanged. Turnover was $445.7 million, more than twice the $168m average daily turnover in May.

Trading was relatively muted before the late flurry, with investors waiting for the rebalancing of the indices, said Matt Goodson, managing director at Salt Funds Management.

“The portfolios drive quite a lot of trading,” Goodson said.

Infratil was among the day’s biggest decliners, falling 4.8% to $10.64 on a volume of 4.6m shares. The infrastructure investment firm has received a lot of attention this week on expectations of being upweighted in some global indices after raising $1 billion in a placement at $10.15 a share and is raising a further $150m from retail investors to help fund plans to grow its CDC data centre business.

Goodson said Infratil’s CDC unit has positioned itself well with long-term leases and strong tenants as investors flock to companies with exposure to AI.

“There’s an absolute boom and interest for all things AI and data centres are the picks and shovels of that,” he said.

Spark NZ was the most heavily traded company, declining 0.3% to $4.06 with 10.3m shares changing hands. Goodman Property fell 0.5% to $2.08 on a volume of 7.6m. Kiwi Property rose 3.1% to 83 cents with 6.4m shares traded, and Contact Energy dropped 3.3% to $8.78 on a volume of 5.3m.

Fisher & Paykel Healthcare, the country’s biggest listed company by market value, fell 2.5% to $30.29 on a volume of 1.9m shares, while Meridian Energy declined 2.4% to $6.10 on a volume of 3.7m and Auckland International Airport rose 1.9% to $7.72 with 3.3m shares traded.

KMD Brands, which operators the Kathmandu and Rip Curl retail brands, ended the day unchanged at 40c, having dropped as low as 38c after warning of weaker-than-expected sales and saying its bankers have loosened some upcoming covenants.

Goodson said KMD’s problems are partly due to the soft economy and partly competitive, with the retailer’s balance sheet also facing strains from its lease liabilities.

Colonial Motor Co fell 0.7% to $7.30 on a small volume of 1643 shares after the car dealership warned of softer earnings in the face of a weaker economy.

Livestock Improvement Corp was unchanged at $1.21 with no trading after the farmer-owned co-operative trimmed its earnings forecast due to the change in tax legislation on claiming deductions on depreciation for commercial buildings.

Among companies exposed to the primary sector, a2 Milk fell 3.5% to $6.95 on a volume of 2.7m shares, Synlait Milk extended its decline, falling 1.8% to 27.5c, and PGG Wrightson slipped 0.7% to $1.50. Meanwhile, Scales Corp rose 2.8% to $3.62, Fonterra Shareholders’ Fund units advanced 1% to $4.10, Sanford increased 5% to $4.20 and T&G Global was up 4.8% at $1.76.

Oceania Healthcare posted the day’s biggest gain on the benchmark index, rising 5.9% to 54c on a volume of 1.8m shares. Radius Residential Care extended its gain after Forsyth Barr started covering the stock, rising 5.8%, or 0.9 of a cent, to 16.3c.

Ryman Healthcare rose 1.6% to $3.81 on a volume of 2.8m, Summerset climbed 3.8% to $9.60 and Arvida gained 2.2% to 95c with 1m shares traded.

Some companies that have been under pressure in recent weeks recovered some of those losses. SkyCity Entertainment rose 5% to $1.47 on a volume of 1.8m shares, Tourism Holdings climbed 3.9% to $1.85, and Fletcher Building increased 2.8% to $2.95 with 2.2m shares traded.

Stride Property rose 3.3% to $1.24 on a volume of 3.4m. A substantial shareholder notice today showed the Accident Compensation Corp’s investment arm increased its stake in the property company to 12.7% from 11.4%.

Channel Infrastructure slipped 1.3% to $1.48. BP NZ sold its stake in the import terminal this week and the company was also downgraded by Forsyth Barr analysts to neutral from outperform.

Scott Technology fell 1.4% to $2.07 with an unusually large volume of 1.3m shares and Tower extended its gains on robust volumes, rising 0.6% to 85c with 1.4m shares traded.