New Zealand shares fell for a fourth day as fears over China's economy continue to cloud global markets, sapping investor appetite for riskier assets such as equities.

The S&P/NZX 50 index dropped 1.4 percent to 6125.73 at midday in Wellington, extending its decline this week to 3.1 percent.

The local market continued its downward run after yesterday's suspension of trading on Chinese stock markets led to another drop on Wall Street. Fears about the strength of China's economy hit the local market in two ways: through investor sentiment, and through direct trade exposure.

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China introduced circuit-breakers this year to try and prevent excessive sell-offs by pausing trading if a certain threshold is met, and suspending it altogether if the CSI 300 falls 7 percent. The CSI 300, a composite of the Shanghai and Shenzhen stock exchanges, has dropped almost 12 percent this year. Regulators had planned to remove selling restrictions for major shareholders, but has since ditched those measures.

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"If you look back to January 2014, the Shanghai exchange was 2000, and even today it's still 3125 - it's had one hell of a bubble, peaking at almost 5200 in the middle of last year," said Matt Goodson, who manages more than $700 million of Australasian equities at Salt Funds Management. "Valuation multiples there are extremely high."

Forty-two of the NZX's top 50 companies fell in morning trading on turnover of about $24 million, led by milk marketer A2 Milk, down 8.1 percent to $1.60. Stock market operator NZX fell 2.9 percent to $1.02 and Kiwi Property Group dropped 2.6 percent to $1.33. Steel & Tube Holdings was the only stock to gain in the top 50, rising 2.2 percent to $2.30.

The decline on New Zealand's stock market has been more muted than elsewhere, with Australia's S&P/ASX 200 index down 6.2 percent this week, Japan's Nikkei 225 index falling 6.7 percent, and Wall Street's S&P 500 index dropping 4.9 percent.

If anything we've probably been holding up a little better than one might have expected.

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The NZX 50 rose 13 percent in 2015, its fourth year of double-digit growth, something Goodson doesn't anticipate will happen again this year.

"We're relatively cautious looking into this year - valuation multiples are quite stretched in the kiwi market," he said. "We've had four good years for the kiwi market - more muted single digit gains at best is a more likely outlook this year."