Britain's FTSE index shed 1.3 per cent while Germany's DAX lost 1.3 per cent.
ASX futures were pointing to a 1.7 per cent drop when that market opens at midday, NZ time.
Tourism Holdings (THL) was the worst hit among the local stocks, dropping 18c, or 6 per cent, to $2.81.
Matt Goodson, managing director at Salt Funds, said THL had suffered an "unfortunate confluence of events" with tourism being affected not just by the outbreak in China but also the widespread bushfires in Australia.
A2 Milk, which is heavily dependent on China as a key market for its infant formula, saw its share price drop by 66c or 4.4 per cent to $14.34.
New Zealand's tourism and education industries are the most-exposed sectors along with sectors such as the seafood exports.
On Sunday, following today's announcement from the New Zealand Government on China travel restrictions, Air New Zealand said it would suspend its Auckland-Shanghai route with immediate effect until March 29, 2020.
All foreign travellers from China have been barred from entering New Zealand for up to two weeks.
In aviation, Air NZ dropped by 11c or 4 per cent to $2.70 while Auckland International Airport 25c at $8.40.
Among other stock movements, Port of Tauranga fell by 16c to $7.42 and Sky City dropped 10c to $2.42.
The outbreak has killed at least 305 people and infected more than 14,300 globally. One person outside mainland China, a man in the Philippines, has died.
The virus has been confirmed in more than 25 countries and territories since it was first detected in the Chinese city of Wuhan in December.
Nearly 60 million people are under lockdown in Chinese cities as international researchers race to develop a vaccine.
The People's Bank of China (PBOC) announced plans to inject US$22bn of liquidity into markets to avert any potential market sell-off.
Mainland Chinese markets re-open today after authorities extended the Lunar New Year holidays to the end of the last week.
The Hong Kong exchange, which was open three days last week, fell 6.7 per cent.
