New Zealand's benchmark share index, the NZX-50 has fallen 2 per cent on opening this morning.
The local market has follwowed another day of falls on Wall Street. The S&P 500 was down 3.1 per cent, the Dow Jones Industrial Average was down 3.2 per cent and the Nasdaq was down 2.7 per cent.
The falls effectively erase Wall Street's gains for the year.
Markets were reacting to the increasing uncertainty and a broadening fo global economic disruption, said Harbour Asset Management's Shane Solly.
As fears around the outbreak grew the timeframes for investors had started to shorten and more volatility was likely, he said.
Croatia, Switzerland, Spain and Austria reported their first cases of the virus while holidaymakers in the Canary Islands were quarantined after an Italian doctor tested positive. Italy now has 322 confirmed cases. Some European Union governments are advising against travelling to infected regions.
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"Covid-19 developments continue to dominate headlines and, with more and more estimated impacts on global growth hitting the wires, investors are getting increasingly nervous," said ANZ Bank senior economist Miles Workman.
European shares continued to tumble with Germany's Dax ending down 1.9 per cent. According to Reuters, the pan-European STOXX 600 index, which fell 1.8 per cent overnight, has seen nearly US$700 billion wiped off its value since Friday's close.
Australian ASX futures were down 130 points at 6,696 with the S&P/NZX 50 Index likely to follow suit.
While investors will be keeping a nervous eye on any covid-19 headlines, domestic earnings reports will remain in focus with Meridian, Michael Hill, Scales and Metlifecare all reporting.
Yesterday, the local bourse ended down 1.3 per cent with Summerset Group leading the market lower. The retirement village operator and developer ended down 8.1 per cent after it said it isn't expecting any underling growth this year.
The kiwi dollar was trading at 63.26 US cents at 8am versus 63.47 US cents at 5pm yesterday.
Workman said that support at 63.00 US cents seems "rock solid" but noted that "New Zealand has always been vulnerable to global shocks and we see that as the predominant risk direction on covid-19 news."
The kiwi may also have found some support when the greenback weakened on expectations that the US Federal Reserve may have to cut interest rates this year to alleviate the pressure caused by the covid-19 outbreak.
The Fed is not expected to cut rates at its March 18 meeting, but expectations for a possible cut in either April or June are growing.
According to CME Group's FedWatch tool, market pricing is that there is a 47.3 per cent chance that the Fed will cut rates to between 1.25 per cent and 1.50 per cent from the current 1.5 per cent to 1.75 per cent range in April. One month ago, market pricing put the chance at 12.4 per cent.