Dairy shares take froth off NZ sharemarket

The S&P/NZX 50 Index declined 61.57 points, or 0.7 percent, to 9,435.7. Within the index, 31 stocks fell, 15 gained, and four were unchanged. Turnover was $111.8 million.

Synlait fell as low as $9.30, ending the day at $9.75, down 14 percent. The milk processor reported a 9.7 percent decline in first-half profit as a new pricing arrangement with A2 Milk and restrictions on Chinese imports squeezed margins.

"When expectations get too high you've got to meet them, and they didn't quite do that," said Grant Davies, an investment adviser at Hamilton Hindin Greene.

Synlait supplies A2 Milk, and its share price has followed the milk marketing firm higher over the past year. However, Davies questions the close link: "The value-add and margin comes in the A2 branding." A2 declined 0.6 percent to $13.62.