The sharemarket today surrendered the week's early gains with the NZX50 dropping 0.86 per cent, or 37.6 points, to 4341.

Mint Asset Management portfolio manager Shane Solly said the drop was not as dramatic as it first appeared, as at least a third of the fall could be explained by a number of major stocks, including Telecom, Trade Me and Auckland International Airport, going ex-dividend.

That effect could be "reasonably meaningful in a high-yielding equity market like New Zealand", he said.

Volumes were again fairly subdued with 52 million shares changing hands. Twenty-six stocks fell and 11 rose.

An announcement that Telecom would retreat from the information technology services market in Australia, cutting 120 jobs at subsidiary Gen-i, appeared to compound its ex-dividend fall. Telecom shares closed down 15 cents, or 6.1 per cent, at $2.30.

Oceana Gold was the stand-out on the day, up 3.9 per cent at $3.22 on the back of a higher gold price.

Tower was up 3c at $1.91 after an update on its proposed return of $120 million of capital to shareholders.

Fisher & Paykel Healthcare was propelled up 4c to $2.62 by the US dollar cross-rate pulling back from its "heady peak".

The currency market had a quiet day with the Trade Weighted Index falling 0.2 to 75.9.

Westpac market strategist Imre Speizer said the market was dead and the kiwi was sleeping ahead of a Reserve Bank meeting tomorrow.

The currency had suffered from publicity surrounding the drought, he said.

"As long as the governor doesn't make too much of a song and dance about that tomorrow I think we might get a wee bounce back in the kiwi, because the bashing on the drought is probably considered to have been overdone."

But if on the other hand Governor Graeme Wheeler made a big deal of it, said there was a big downside risk to GDP and suggested interest rates might not go up as quickly, there would then be a "very big reaction" and the kiwi would fall further, Speizer said.

The 90-day bank bill rate was down 1 basis point to 2.66 per cent.

- © Fairfax NZ News