The share market plunged more than 7 per cent today as the Prime Minister confirmed evidence of community transmission of Covid-19 and announced the country had 48 hours to prepare for strict isolation.

The S&P/NZX50 fell 697.72 points, or 7.6 per cent, to 8,98.70. Within the index, 49 stocks fell, and one rose. Turnover was $267.2 million.

The government today ratcheted up its response to the mounting virus outbreak by imposing a national lockdown from 11.59pm Wednesday.

All bars, restaurants, cafes, cinemas, civic amenities and all non-essential businesses will be required to close. For non-essential businesses, working from home is now immediately required, if unable to operate from home, firms must be closed.

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Prime Minister Jacinda Ardern acknowledged the shutdown will cause "unprecedented economic and social disruption" but will save "tens of thousands" of lives.

"Like the rest of the world, we are facing the potential for devastating impacts from this virus. But, through decisive action, and through working together, do we have a small window to get ahead of it," she said.

Shane Solly, a portfolio manager at Harbour Asset Management, said capital markets are dislocated with many investors waiting to see the outbreak peak before buying back in.

"While it is difficult to know when Covid will stop impacting on economies, we do know central banks and governments are acting aggressively and on a unified basis to provide support," he said.

The Reserve Bank has initiated a $30 billion quantitative easing programme to help maintain liquidity in bond markets and keep interest rates low, while the government today announced it was almost doubling the size of its wage subsidy programme.

However, this did little to ease the sell-off which Hamilton Hindin Greene director Grant Williamson described as a "bloodbath."

"I can't say I've ever experienced a two-to-three-week period like this," he said.

Greg Smith, head of research at Fat Prophets, said investors were in a "state of panic, and disarray" as they likely did not anticipate such a swift move to the shutdown.

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"New Zealand, barring essential services, is effectively now closed for a month," he said.

Tourism Holdings led the market lower, plunging 46.1 per cent to 55 cents. Vista Group International fell 28.4 per cent to 96 cents, Kathmandu Holdings dropped 27.8 per cent to 70 cents and Sky Network Television declined 28.3 per cent to 19 cents.

SkyCity Entertainment Group today advised it is immediately closing its New Zealand casino and entertainment facilities in Auckland, Hamilton and Queenstown in line with the new government recommendations and withdrew its annual guidance. The shares fell 14.5 per cent to $1.30.

Solly said a blowout in defensive sectors suggested investors were reallocating assets away from equities. Williamson said some investors were switching to cash to ride out the looming recession.

Kiwi Property Group declined 21.1 per cent to 75 cents. The company today announced it had refinanced $214m of bank debt facilities which had been set to expire in the next two years and had $303m in undrawn credit lines.

Argosy Property fell 24.8 per cent to 76 cents, Precinct Properties New Zealand decreased 13.5 per cent to $1.46, Goodman Property Trust slipped 11.7 per cent to $1.88.

Aged-care providers came under a new wave of selling pressure. Oceania Healthcare dropped 21.6 per cent to 40 cents, Ryman Healthcare retreated 21 per cent to $6.64, Metlifecare declined 17 per cent to $4.25, and Summerset Group fell 14.3 per cent to $3.71.

Air New Zealand fell 19.2 per cent to 80 cents and Auckland International Airport fell 7.4 per cent to $4.63.

Some investors used the slump in share prices as a buying opportunity. A2 Milk raised its stake in Synlait Milk to 19.8 per cent from 17.4 per cent. A2 bought the shares at $4.95 apiece, below its average entry price. Synlait dropped 3.9 per cent to $4.90 today and A2 was down 3.3 per cent at $15.94.

Fonterra Shareholders' Fund units declined 5.4 per cent to $3.70.

Fisher & Paykel Healthcare, which manufactures respirators, was the only stock on the NZX50 to gain today, rising 2.3 per cent to $27.27. The manufacturer said it has been designated an essential service and will continue operations in its Auckland facilities.

NZX Limited, which has also been designated an essential service and will remain in operation, fell 8.7 per cent to 95 cents.

"There's probably some market upside risk if, in a few weeks' time, the government's bold measures are successful at stopping Covid-19 in its tracks as has been the case in China," Fat Prophets' Smith said.