New Zealand stocks were caught in the downdraft of Wall Street's big drop, the S&P/NZX50 dropping by 1.75 per cent.
By the close the index was down 218.4 points at 12,251.9.
Turnover of 57.8 million shares, worth $187.5 million, was on the low-to-average side.
Wall Street's S&P500 index fell by 1.9 per cent on Monday - its worst day in a month - as Covid-19 cases surged while hopes of an economic stimulus package from the government started to wane.
"It was just the backwash from the US moves for New Zealand and Australia, with New Zealand closed for the holiday on Monday," Matt Goodson, managing director at Salt Funds, said.
"Sometimes we ignore these overseas moves and sometimes we don't, and today was one of these days where we were caught up with it, but only after a very strong run of late," Goodson said.
Confirmation from investment company Infratil that it planned to buy 60 per cent of Australian dianostic imaging company Qscan Group for up to A$330m ($351.8m) was "not hugely material" for Infratil, Goodson said. Infratil closed 9.5c down at $5.50.
In aviation, shares in Auckland International Airport dropped by 17 cents to $7.19 while Air New Zealand fell by 4c to $1.49.
"They have both been very strong in recent weeks, perhaps defying some of the Covid scares that we have seen globally," Goodson said.
The Government, and 52 per cent owner, has put up $900m in loans for Air New Zealand, at rates of interest between 7 and 9 per cent.
"Certainly, in the case of Air NZ they are clearly in drawing down mode with that expensive Government debt," Goodson said.
"At some point, equity will need to be raised to repay that," he said.
In Auckland Airport's case, the company had outperformed Sydney Airport, despite the local utility having greater exposure to the heavily curtailed overseas travel market.
Goodson said it may be that the market was adjusting to reflect that apparent discrepancy.
Despite the cloud overhanging international aviation, the travel, booking and expense management firm Serko said support for its share purchase plan meant it would accept an extra $10m in applications, taking the total to $20m. The SPP is part of Serko's equity raising initiative announced on 1 October 2020, when it successfully raised $47.5m through a share placement.
However, the prospect of more shares coming on issue saw the share price drop by 11c to $4.89.
F&P Healthcare, despite being a beneficiary of the rapidly spreading Covid-19 pandemic, saw its share price fall by $1.25 to $34.61.
"Overall, business should be travelling pretty well but is had a strong run over the last few days," Goodson said.
A2 Milk fell 25c to $15.12. The alternative milk company has been under pressure since late September, when it said it was seeing disruption to the corporate daigou and reseller channel, particularly due to the Stage 4 lockdown in Victoria.
Melbourne, a key city for the unofficial trade, came out of lockdown on Monday.