New Zealand shares fell after telecommunications network operator Chorus said a draft view of price curbs proposed by the regulator could wipe $160 million from earnings.
Xero soared to a record after raising funds from US investors.
The NZX 50 Index fell 0.99 points, or 0.02%, to 4049.09. Within the index, 20 stocks rose, 15 fell and 15 were unchanged. Turnover of $143 million was dominated by Telecom, Chorus and Fletcher Building.
Chorus, which was spun off from Telecom last year, tumbled 14% to $2.91 after the Commerce Commission released draft plans to steeply cut what the telecommunications network operator can charge for access to electronic switchgear on its ageing copper lines.
Communications Minister Amy Adams is reviewing the recommendation, suggesting it could yet be pared back.
"As it sits it's certainly pretty bad for Chorus, with implications for dividends and debt," says David Price, a broker at Forsyth Barr. Still, the minister's quick response implies "we will get some sort of change".
Ms Adams asked her officials to review the effects of the pricing and said it's important to find a methodology appropriate to New Zealand.
Telecom rose 0.4% to $2.32. The stock is rated 'underperform' based on the consensus of 11 recommendations compiled by Reuters, with a price target of $2.23.
Xero, the cloud-based accounting service, rose about 12% to a record close of $7.70, giving the company a market value of $902 million before it has even made a profit.
The company raised $82 million selling shares to two US funds, including the Peter Thiel-backed Valar Ventures at $6 apiece.
Mr Price says the capital raising gives Xero enough cash for three years at its current burn rate and the confidence shown by the US investors "is an endorsement of the stock".
PGG Wrightson rose 2.8% to 37 cents after the nation's largest rural services company said it has finally received repayment of loans over the Crafar Farms of about $25 million after the sale of the properties to China's Shanghai Pengxin Group.
The Crafar Farms went into receivership in 2009.
Warehouse Group, the biggest retailer on the exchange, gained 2.6% to $3.13 and Fisher & Paykel Healthcare gained about 2% to $2.61.
Glass Earth Gold tumbled 13% to 21 cents. The company is raising as much as $C3 million in a private placement in Canada to develop its Neavesville and WKP projects in the Hauraki region, it said today.
Fletcher Building, the biggest company on the exchange, rose 0.8% to $7.98. Contact Energy, the biggest power company on the NZX 50, gained 1.3% to $5.39.
Tourism Holdings, the campervan company, gained 1.4% to 74 cents.