New Zealand shares fell Wednesday ahead of the release of third-quarter gross domestic product data, with markets expecting a further contraction in the economy.

The S&P/NZX 50 Index was down 0.4%, or 48.75 points, to close at 12,865.55.

The country's economy is expected to have contracted further in the third quarter, with data due Thursday. The Reserve Bank of New Zealand is expecting a 0.2% decline, while the consensus forecast according to Trading Economics is for a 0.4% contraction.

The official GDP figure will come on the heels of the Treasury's economic and fiscal update, which forecasts that the country will stay in deficit up to the end of 2028.

Elsewhere, Asian peers traded mixed ahead of the Fed's expected rate cut. The Shanghai SSE was up 0.7%, Hong Kong's Hang Seng rose 0.6%, and Japan's Nikkei 225 lost 0.5%.

In other domestic news, New Zealand's seasonally adjusted current account deficit narrowed by NZ$892 million to NZ$6.2 billion in the September quarter, Stats NZ data showed Wednesday.

Consumer confidence rose to a three-year high in December, with the Westpac McDermott Miller Consumer Confidence Index climbing 7 points to 97.5.

In corporate news, Air New Zealand (NZE:AIR, ASX:AIZ) gained 1% after it reported that its group capacity rose 3.9% year on year in November following a 2.1% decline in October.

Mercury NZ (NZE:MCY, ASX:MCY) went up past 3% after disclosing that it will build a NZ$287 million wind farm in Northland, raising its total commitment to new renewables to more than NZ$1 billion over two years.