NZ sharemarket still down 1pc at midday

NZX shares last traded at $1.01, and have dropped 8.4 percent over the past year.

The New Zealand share market opened down 1 per cent this morning on the back of Britain's decision to leave the European Union and has stayed at that point in morning trading

The S&P NZX 50 was down 1.1 per cent to 6596.80 in early trading. It had improved very slightly and was down about 1.0 per cent at midday.

Across the Ditch, Australia's ASX 200 was down more than 1 per cent in early trading but had recovered to be down by 0.36 per cent at around 12:20 pm (NZT).

Investors were bracing themselves for more fall-out as trading resumes today after Britain's shock vote sparked market chaos on Friday, evoking memories of the 1987 crash and Global Financial Crisis.

Mark Lister, head of private wealth research at Craigs Investment Partners, said about three quarters of the NZX-50 constituent stocks were "in the red". "None of them have fallen out of bed completely, so it's a reasonably modest but broad-based sell-off," he said.

The NZX-50 is now down 6.3 per cent since its most recent peak earlier this month on June 7.

How Asian markets react later today will set the tone for New Zealand investors.

Australia's ASX-200 and Japan's Nikkei both opened at midday. Hong Kong's Hang Seng and Shanghai markets both open at around 1.30pm (NZT)

"Looking at the futures, the Australian market looks like it's going to open flat, there might be some bounce-back in Asian markets but there are still a lot of unknowns," said Craig Stent, director and research analyst at Harbour Asset Management. "The market's been looking for a reason to sell off for a period of time, and this has given them one.

The New Zealand market's been very strong year-to-date so you may see some continuation of that retreat. It's uncertainty and markets don't like uncertainty.

The local market has gained 5.4 percent this year and reached an all-time peak of 7,039.42 on May 31. Today's fall takes it back to trading levels last seen in mid-March.

The Chicago Board Options Exchange's Volatility Index, known as Wall Street's 'fear gauge' jumped 49 percent to its highest level since February as uncertainty reigned through the global markets, and Harbour's Stent says that uncertainty isn't going away anytime soon.

"Brussels want to make a strong statement to other countries in the EU - if you're going to leave, it's going to be a messy divorce. The British pound has weakened against most currencies and that's been a bit of a relief valve. Broader economic impacts are still to be worked through, and it's going to take a couple of years or longer," Stent said.

The surprise referendum result sent the British pound plunging to a 31-year low against the US dollar, while US$2 trillion was wiped off the value of global sharemarkets.

London's FTSE 100 index fell more than 8 per cent at the open on Friday before recovering, to close down 3.2 per cent, after Bank of England governor Mark Carney pledged to do whatever it takes to support the markets.

Investors dumped riskier assets such as shares while seeking refuge in the US dollar and other safe havens such as gold and US Treasury bonds.

The big British bank stocks took an epic battering, with Lloyds, Barclays and RBS dropping as much as 30 per cent, although they reclaimed nearly half those losses later in the day.

The S&P/NZX 50 closed down 2.3 per cent and Australia's S&P/ASX 200 fell 3.2 per cent.

Japan's Nikkei slumped almost 8 per cent, while France's Cac 40 fell 8 per cent and Germany's DAX plunged 6.8 per cent.

Across the Atlantic, Wall Street had its biggest sell-off in 10 months, with the S&P 500 dropping 3.6 per cent and the Nasdaq losing 4.1 per cent.

- with BusinessDesk