The Deloitte South Island index underwent its largest quarterly decline, in both dollar value and percentage terms, since its inception in December, 2007.
The decline came after the index reached a record peak in the September quarter, Scott McClay, a corporate finance partner in Deloitte's Christchurch office, said.
``Similar to the weather conditions over the summer, the last quarter of the year was not as great as anticipated for South Island listed companies in terms of share price performance.
``It is likely that the impact of global events occurring early in the quarter had a detrimental flow-on effect despite some solid results being announced,'' Mr McClay said in a statement.
It was one of the times when stock market activity did not correlate to the actual financial performance of the companies.
It was an indicator of investors taking a wider view rather than simply the individual company's performance.
`This marks a change in conditions for South Island companies but they remain resilient,'' he said.
The top performer for the quarter, in both dollar value and percentage terms, was Arvida Group, which grew by $89.6million (27%) in market capitalisation.
The remaining top performers included Pacific Edge (up $49.6million, or 28.2%), Scales Corporation (up $30.7million, 6.8%), Skellerup Holdings (up $29million, 11%) and Synlait Milk (up $26.6million, 5%).
The most significant declines came from three of the four largest companies on the index- Ryman Healthcare, EBOS Group and Skyline Enterprises saw their market capitalisations drop $760million (15.8%), $326.6million (11.4%) and $102.1million (12%) respectively.
Ryman seemed to have been caught up in the general New Zealand market downturn since early 2016, the report said.
The decline was despite Ryman reporting its half-year results to September 30 last year in which it highlighted a $76.5million underlying profit, a 9% increase on the corresponding period the previous year.
Skyline Enterprises, ``one of the darlings'' of the index, suffered its first quarterly decline since the March 2011 quarter, ending its record run of 19 consecutive quarterly gains.
The Queenstown-based company's decline in market capitalisation for the quarter was $102.1million (12%) as its share price dropped $3 to $22 per share.
PGG Wrightson had a difficult quarter as its market capitalisation dropped $26.4 million (6.6%), while Silver Fern Farms dropped $20.1million (18.4%).
Only two of the seven sectors posted positive movement, with biotechnology (up 16.9%) - led by Pacific Edge.
The property sector dropped the most as it fell 13% during the quarter on the back of Ryman Healthcare's performance.
