New Zealand shares fell as a strong kiwi dollar weighed on export heavyweights Fisher & Paykel Healthcare and A2 Milk, pushing the market lower and giving back much of yesterday’s gains.

The S&P/NZX 50 Index dropped 225.47 points, or 2 percent, to 11,298.69. Within the index, 29 fell, 17 stocks rose, and four were unchanged. Turnover was $264.3 million.

The local benchmark was off the pace as stock markets across Asia followed Wall Street, where the Nasdaq hit an all-time high on optimism about the global recovery. That has helped push the kiwi dollar to a five-month high as investors return to risk-sensitive assets. 

Australia’s S&P/ASX 200 Index gained 2.8 percent in afternoon trading, catching up after yesterday's Queen's Birthday public holiday there. 

“Fisher & Paykel and A2 Milk are doing most of the damage,” says Grant Davies, an investment adviser at Hamilton Hindin Greene.

The two big exporters were the initial drag that turned the market, along with a number of property and yield stocks, he says.  

F&P Healthcare led the market lower, falling 5.7 per cent to $28.30. A2 Milk dropped 4 per cent to $19.01.

The kiwi dollar has been on an upward trajectory since it bottomed out in March at a 10-year low. Since then, it's put on more than 10 US cents, trading around 65 US cents. That reduces the value of exports for the likes of F&P Healthcare and A2, which both generate large amounts of revenue in US dollars. 

US-based donation company Pushpay also declined, down 0.6 per cent at $7.

Property stocks were weaker. Precinct Properties New Zealand declined 2.3 per cent to $1.71, Property for Industry fell 3.1 per cent to $2.38, Goodman Property Trust dropped 2 per cent to $2.23 and Kiwi Property Group decreased 2.2 per cent to $1.145.

NZX fell 1.4 per cent to $1.46 with 11.7 million shares traded. The bulk of that was in a single trade of 11.4 million shares at $1.40.

Spark New Zealand declined 2.1 per cent to $4.39 with 6.2 million shares traded.

Auckland International Airport fell 3.6 per cent to $6.95, more than offsetting yesterday’s 2.7 per cent gain.

Still, the positive mood continued for some of the worst-affected companies which continued to recovery with investors happy to take on risk.

“There is some optimism out there for some companies that are purely focused on New Zealand as some investors think we are through the worst,” says Davies.

Sky Network Television posted the day's biggest gain, rising 8.8 per cent to 18.5 cents. Air New Zealand rose 8.4 per cent to $1.94 and SkyCity Entertainment Group increased 5.7 per cent to $3.14.

Refining NZ advanced 3.3 per cent to 95 cents and Z Energy rose 1.3 per cent to $3.15.

On Tuesday, Infratil announced it would raise up to $300 million of new equity to help advance its growth plans and allow it to snap up opportunities through the recession.

The infrastructure investment firm will offer new shares at $4.76, an 8 percent discount on the $5.175 price the stock closed at yesterday. The stock is now on a trading halt.

Davies says Infratil is taking advantage of the recovery to build a war chest for its existing development pipeline.

“In this volatile market it pays to make hay while the sun shines and raise capital while things are looking reasonably positive."

-Originally published by BusinessDesk.