New Zealand shares fell lower as investors reacted to new requirements that all travellers entering the country self-isolate for 14 days.
The S&P/NZX fell 349.92 points, or 3.6 per cent, to 9,476.94. Within the index, 41 stocks fell, two were unchanged and seven fell. Turnover was $223.5 million.
Prime Minster Jacinda Ardern announced the travel restriction on Saturday, describing it as the strictest in the world as the government tries to flatten the rate of covid-19 outbreak.
This morning the Reserve Bank slashed the official cash rate by 75 basis points to a record low 0.25 per cent in an effort to offset the negative economic impact of the efforts to slow the virus.
Investment adviser Peter McIntyre said as the virus escalates in the United Kingdom and the United States, investors were increasingly changing risk profiles and moving into cash as bond markets begin pricing in a recession.
"It seems like the gate has been open and a few sheep were getting out, but now it seems like half the flock is wanting to leave," he said.
A strong lead from Wall Street, which saw benchmark indices close more than 9 per cent higher, was outweighed by the travel restrictions effectively closing the border to non-residents.
"Anything tourism related, whether in airlines or entertainment or hospitality, it has just been hammered both here and in Australia," McIntyre said.
Tourism Holdings led the market lower, falling 31.8 per cent to $1.33. The stock has lost more than half its value since January.
"It has been on a downward trajectory for the last six months," McIntyre said. "Earnings downgrades were the first cause of share price reaction on the downside, but now obviously covid-19 has had a more material impact."
Air New Zealand, which is on a trading halt, announced it would slash its international long-haul service by 85 per cent over coming months and has already started to identify a wave of redundancies to reduce its cost base.
Auckland International Airport has suspended both its earnings and capital expenditure guidance for the current financial year. Its share price fell 20.9 per cent to $5.22 with 7.9 million shares trading hands.
McIntyre said retirement village operators had been hit hard on concerns residents were more at risk of covid-19.
"Even though we've only had eight cases reported, there is a lot risk being moved off the table here," he said.
Oceania Healthcare fell 16.3 per cent to 67 cents with 9.5 million shares traded. Summerset Group Holdings fell 13.4 per cent to $4.91, Arvida Group declined 9.2 per cent to $1.19, Ryman Healthcare decreased 7.3 per cent to $10.85.
Lender Westpac Banking Corp fell 0.1 per cent to $16.98 and Australia and New Zealand Banking Group slipped 1.6 per cent to $17.22.
The dual-listed banking stocks climbed more than 7 per cent in early trading but fell again when the Australian market opened weaker. The S&P/ASX 200 was trading down 7.6 per cent at local market close.
Wellington Drive Technologies fell 6.5 per cent to 13 cents after it said its supply chain is still being affected by the outbreak, and that first-quarter revenue was below expectations.
Good Spirits Hospitality also withdrew its earnings guidance on the restrictions, saying the impact was going to be bigger than anticipated. The shares dropped 2.9 per cent to 13.6 cents.
Probiotics maker Blis Technologies rose 26.5 per cent to 6.2 cents. The firm upgraded revenue and earnings guidance for the March year on the back of strong demand for its products.
Fisher & Paykel Healthcare gained 9.1 per cent to $25.20 on a volume of a million shares, and Spark New Zealand rose 1.2 per cent to $4.15 with 4.3 million shares traded. The two stocks make up 15 per cent of the NZX 50, protecting the local index from the more dramatic falls seen across the Tasman.