New Zealand shares fell, extending the S&P/NZX 50 Index's correction from a record high on September 7 as investors fretted that valuations weren't supported by earnings growth.
Trade Me, Fletcher Building and Metro Performance Glass led the decline, while Abano Healthcare jumped after a takeover approach from a group of dissident shareholders.
The S&P/NZX 50 Index fell 70.47 points, or 1 percent, to 6,708.47. Within the index, 36 stocks declined, 10 rose and five were unchanged. Turnover was $105 million.
Offshore investment in the NZ market reached a record high at the end of September, according to Forsyth Barr.
The index has now fallen 11.3 percent from its all-time high of 7,571.10 on September 7. A fall of 10 percent or more is regarded as a correction.
Trade Me fell 3 percent to $4.47 and Fletcher declined 2.8 percent to $9.72. Tegel Group Holdings fell 2.7 percent to $1.46 and MetroGlass dropped 2.4 percent to $2.
David Price, a broker at Forsyth Barr, said the average price-to-earnings ratio (P/E) for companies on the NZX 50 has retreated to about 18 times from a P/E "of 20-plus" but there hasn't been panic selling. The P/E has averaged 17 percent in the past five years.
"We were bloody expensive and now we're just expensive," Mr Price said.
SkyCity fell 2.4 percent to $3.62 and Air New Zealand fell 1.6 percent to $1.87.
Abano jumped 14 percent to $9 after the group's dissident shareholders Anya and Peter Hutson and James Reeves are seeking control of the dental clinic and radiology operator in a partial takeover offer.
Spark NZ fell 1.4 percent to $3.415 as the telephone company told shareholders at their annual meeting that it wants to steer customers away from Chorus's copper lines, which it said weren't as reliable for broadband services. Chorus gained 0.9 percent to $3.57.
Gentrack Group rose 2.6 percent to $3.50 after the utilities software developer said annual earnings rose 16 percent, beating guidance and shrugging off the impact of a strong kiwi dollar dragging on its export receipts.
Stride Property fell 2.1 percent to $1.84, the biggest decliner among property companies. Kiwi Property Group declined 1.7 percent to $1.425 and Argosy Property fell 1.4 percent to $1.045. Freightways dipped 1.4 percent to $6.34.