The New Zealand share market fell by 3 per cent in morning trading while the Kiwi dollar dropped to its lowest point since August 2015 as concerns about the economic effects of the coronavirus outbreak continued to mount.

Data over the weekend showing the Chinese economy was rapidly slowing acted to undermine markets, as did another weak close on Wall Street on Friday.

By 11 am the Kiwi was trading at US62c, down from its 62.4c close at the end of last week.

Earlier in the session, the Kiwi fell to US$61.80c after ANZ economists said they now expect the Reserve Bank to cut the official cash rate by 50 basis points in March and a further 25 basis points in May, taking the rate to just 0.25 per cent.

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China's manufacturing purchasing managers' index, one of the first official economic indicators published since the coronavirus outbreak, fell to 35.7 in February, a record low, and down from 50 in January.

Last week, US Federal Reserve chairman Jay Powell said the US central bank would "act as appropriate" to support growth.

This helped the S&P 500 pare earlier losses to close down 0.8 per cent after being down as much as 3 per cent.

Finance Minister Grant Robertson, speaking on TVNZ's Q&A programme on Sunday, said he does not expect New Zealand to fall into recession.

"The information that we have today is that there won't be one, that's the advice that we are getting," he said.

"We'll have very low, if any, growth, in the first quarter, in the second quarter, perhaps some growth.

"But this moves fast. That prediction could be revised in the coming weeks," he said.

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Bank of New Zealand senior markets strategist Jason Wong said the New Zealand dollar could fall further if the situation worsens.

"The longer that this continues, there will be more downside," he said.

Greg Smith, head of research at Fat Prophets, said fear was running high with the virus continuing to spread globally.

By 11.20 am the sharemarket's NZX50 index was down by 366 points, or 3.2 per cent, at 10,896.

"The first case of coronavirus in New Zealand has investors pretty worried," said Hamilton Hinden Greene director Grant Williamson.

Investors were not just dumping shares with exposure to China.

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By mid-morning Ryman Healthcare was down 4.3 per cent at $14.60 while Mercury NZ was down 4.7 per cent at $4.56.

Meanwhile, Synlait Milk shed 4.2 per cent to $5.75 and A2 Milk was down 3.4 per cent at $15.75.

Air New Zealand lost 5.5 per cent, trading at $2.145 and Auckland International Airport dropped 5.5 per cent to $7.44.

"We had a build-up of sellers over the weekend and they came into the market first thing this morning," Williamson said.

"We might see some bargain hunting coming through later. It will depend on how the Australian and Asian markets perform today," said Williamson.

One of the few stocks to be unscathed was SkyCity Entertainment Group, which was unchanged at 3.20.

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Overall, however, there's not a lot of volume and not a lot of buying support, he said.

On the potential for a rate cut, Kiwibank senior portfolio manager Ross Weston said the market is pricing 33 basis points of rate cuts by March, 54 by June and a total of 67 basis points over the next year, which is almost three rate cuts.

The central bank's monetary policy committee's OCR review is on March 25.

- Additional reporting, BusinessDesk