Harbour Asset Management portfolio manager Shane Solly said the market had become complacent about Covid-19, and news of the latest variant was a reminder that it was not going to do down without a fight.
"There is a way to go," he said.
"It may mean a couple of weeks of uncertainty until the labs have found out what it is and whether existing treatments can deal with it," he said.
Travel and travel-related stocks bore the brunt of selling.
Among them was Auckland International Airport down 21c or 2.7 per cent at $7.55 and Air New Zealand, down 5.5c or 3.5 per cent at $1.52.
Kathmandu, a significant travel baggage retailer, dropped by 6c or 4 per cent to $1.42.
Prime Minister Jacinda Ardern said earlier it was too early to say what changes health officials may need to make in response to the Omicron variant.
Ardern said that authorities could respond very quickly at the border and all travellers were still required to go through the MIQ system.
Two cases of the Omicron variant were confirmed in Australia last night.
