The local sharemarket has fallen to a three-month low as investors take profits and chase rising interest rates from bonds.
Some blue chip stocks have fallen by 10 percent or more in the last month. Photo: NZX / Supplied
The benchmark NZX-50 index, which vaulted to a record high just a month ago, has fallen close to 7 percent since then.
It has moved from being one of the best performing stock markets in the world to being a significant underperformer.
Craigs Investment Partners head of private wealth research Mark Lister said the market had been looking overheated.
Foreign investors had cashed up to take advantage of high prices and a fall in the currency, which had increased their earnings, he said.
Stock markets still had challenges ahead, such as the US presidential election, and the policies of central banks around the world.
However, there was also opportunity for those who had been sitting on the sidelines, Mr Lister said.
"A correction of 6 or 7 percent across the board and as high as 10 or 15 percent for some stocks should be viewed as a buying opportunity, so it's not all bad that some of the heat [has] come out of the market."
Among the leading stocks to have been sold down by 10 percent or more over the last month were Auckland International Airport, Air New Zealand, Sky City, and Z Energy.
"Some of the offshore money that had been invested in the blue chips has been exiting and that's been causing more substantial weakness than people might have thought," Mr Lister said.
"For long term investors that's not a worry at all, it's more of a technical issue - so I think it's not a bad time to be looking at some of the good quality blue chips on the market."