Ongoing fallout from the US Federal Reserve's plan to ease its money printing policy and uncertainty in the Asian markets are being blamed for a more than 1 per cent fall on the New Zealand share market.

The NZX50 index closed down 47.052 points, or 1.1 per cent to 4316.993 yesterday increasing the market's decline since its May 13 peak to 7.6 per cent.

Shane Solly, portfolio manager at Mint Asset Management said the New Zealand market was still dealing with the Federal Reserve governor Ben Bernanke's comments from the tail end of last week confirming he would pull back on its quantitative easing programme later this year.

Solly said New Zealand was seen as a strong yield market and people were pulling out of their investments on the perception that bond yields would rise.


Solly said a fall in China's stock market was also having an impact although Australia's share market had been hit harder by the China situation.

The Shanghai Exchange Composite Index fell 4.7 percent in afternoon trading, on the back fears of a slow-down in the economic powerhouse.

Solly said Australia was more exposed through its mining stocks than New Zealand where most of this country's exposure was via soft commodities - an area which was not showing weakness in demand.

James Smalley, a director at broker Hamilton Hindin Greene said much of the damage to the New Zealand share market had been done in the last hour.

Smalley said property stocks had been hit after Vital Healthcare revealed plans for a capital raising.

Smalley said it was hard to know if the market was headed for a correction - a term used to describe a market that has fallen by 10 per cent.

"We don't really know until after it has happened."