By late morning, the S&P/NZX50 index had dropped by 137 points or 1% to 13,329.95 after briefly hitting a record high last week.
Precinct Property’s capital raise was also weighing on the market, as investors sold other property stocks to free up money to participate in the issue.
Among the leading issues, power generator Meridian was the hardest hit, dropping 23c or 3.85% to $5.75.
Trade uncertainty also caused some volatility in the New Zealand dollar, which traded in New York at US57.50c but opened locally at US57.30c.
The Australian sharemarket is set to open sharply lower this morning, with ASX futures lower by 0.9%.
Craigs Investment Partners investment director Mark Lister said a period of relative calm on the markets had come to an end as the world’s two biggest economies looked to again be at loggerheads on trade.
“I would expect all of the markets in our time zone to weaken today, and there is a good chance of further weakness on Wall Street and with those other bigger markets overnight,” Lister said.
Ryman Healthcare was down 9c to $2.80 after a strong run last week.
Fletcher Building, which also showed signs of life last week, was down 8c at $3.21 after giving a gloomy trading update.
In property, Stride was down 4c at $1.48 and Kiwi Income fell 3c to $1.095.
Lister said the market’s modest decline overall was “not a bad showing”.
“The markets have had a hell of a run and have strengthened significantly since those lows of April,” he said.
“Even the little New Zealand market has gained 14% since those April lows.”
Kiwibank economists said they would be watching closely for further developments, and hoping for a quick resolution.
“The tit for tat trade spat between the US and China (our two largest trading partners) doesn’t bode well for little ol’ Aotearoa,” they said.
“Weaker global growth and weaker Kiwi growth – that’s the last thing we need."
Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.
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