Air NZ warning weighs on tourism; NZ shares fall

The S&P/NZX 50 index declined 80.86 points, or 0.9 percent, to 8,925.52. Within the index, 26 stocks fell, 17 gained, and seven were unchanged. Turnover was $193.4 million.

Air New Zealand hit a three-month low after warning its annual earnings will fall by as much as 37 percent. The airline expects pre-tax earnings of $340-400 million in the year ending June 30, downgrading its forecast due to global issues with Rolls Royce engines disrupting schedules. The stock ended the day down 13 percent at $2.83 on a volume of 3.1 million, more than three times it 90-day average.

"One positive has been the dividend policy is unchanged at the moment - that's a positive for investors," said Peter McIntyre, an investment advisor at Craigs Investment Partners.

The downgrade flowed through to other tourism-related stocks, including rental motor home operator Tourism Holdings and Auckland Airport, and might indicate signs of global economic growth slowing down, he said. Tourism Holdings dropped 6.1 percent to $4.80 on a volume of 434,000 - more than twice the average. Auckland Airport fell 3.5 percent to $7.27 on a volume of 1.8 million.