The New Zealand share market has entered bear market territory, having fallen by more than 20 per cent from its record high reached less than a month ago.
Shortly after 11.30 am the S&P/NZX50 index was down 8.3 per cent, or 859 points, at 9474, following on from Wall Street's 10 per cent decline - its biggest since the Global Financial Crisis.
At this morning's level, the S&P/NZX50 is 2,553 points or 21.1 per cent down from its record, set on February 21, of 12,073.
"Markets are now red-lining on fear and even seasoned market commentators are stunned by the velocity of this correction," Craigs Investment Partners said in its morning newsletter..
"The global scale of Government decisions to close down Cities, Countries and Trade Lanes in an effort to "self-isolate" and halt the spread of the COVID-19 virus is unprecedented (at least since World War II) and is clearly shaping as the "ultimate black swan event."
"Given the containment measures a "V-shaped" recovery is no longer possible, best case scenario would appear to be a (6-9 month) "U-shaped" recovery…
"NZ's two largest GDP contributors are tourism and dairy…it is unfortunate that we are now also contending with a drought across the majority of NZ's most fertile land."
By 1pm the S&P/NZX 50 Index had clawed back earlier losses when Australian markets opened, having slumped as much as 8.3 per cent as coronavirus fears turned into panic and investors sold shares indiscriminately.
"Investors are concerned now that governments have lost control and moved too late," said Greg Smith, head of research at Fat Prophets.
"We are seeing the fear that was around turn into panic and indiscriminate selling."
Smith described the NZX falling from an all-time record to a bear market in just 15 trading days as "unprecedented." During the global financial crisis in 2008, it took more than a year for the market to bottom out.
Financial markets slumped overnight after US President Donald Trump announced a US-Europe travel ban, delivering another blow to already weakened markets.
Among the early movements on the NZX, Auckland International Airport fell by 71c or 9.9 per cent to $6.45, while F&P Healthcare dropped by $2.07 or 8.5 per cent to $22.22.
The airport shares continued to fall and were down 15.5 per cent at lunch time. Air New Zealand shares fell 8.52 per cent to $1.61.
Auckland International Airport earlier today slashed its full-year earnings guidance by as much as 22 per cent while Tourism Holdings withdrew its forecast altogether because of the economic uncertainty created by the coronavirus crisis.
After US President Donald Trump announced a ban on travellers from Europe yesterday, both companies warned their earnings were at risk while the airport's shares went into a trading halt just before 4pm yesterday.
Today, the airport said it now expects net underlying earnings for the year ending June will come in between $210 million and $235m, down from its guidance just three weeks ago of $260m to $270m.
Retirement village operators were also among the hardest hit. Oceania Healthcare dropped 12.1 per cent to 80 cents, Ryman Healthcare fell 10.4 per cent to $11.60 and Summerset Group Holdings decreased 11.8 per cent to $5.58.
Smith said even relatively defensive stocks that shouldn't be significantly impacted by the virus fallout were being sold off.
Spark New Zealand fell 5.9 per cent to $4.105 despite being an almost entirely domestic business and manufacturer Fisher & Paykel Healthcare dropped 8.4 per cent to $22.25 despite last month noting increased sales due to the virus outbreak.
Stuart Williams, head of equities at Nikko Asset Management, said Fisher & Paykel was the "perfect example" of a stock price being pulled in the currents of the market despite having strong fundamentals.
"What you are getting at the moment is everything being sold off regardless of its individual or industry attributes," he said.
Separately, New Zealand's manufacturing expanded for the first time in three months.
The latest BNZ-BusinessNZ performance of manufacturing index rose to 53.2 in February, from 49.8 in January, putting it in line with its long-term average. A measure above 50 indicates expansion.
By firm size, all four categories were above 50 in February. However, medium-to-large firms – those with between 51 and 100 employees – were leading the way, with a reading of 58.2.
Kiwi dollar at 10-year low
Overnight, the New Zealand dollar hit a 10-year low as the fallout from the coronavirus outbreak continued to unfold.
The currency bumped up a little after the US Federal Reserve announced that it would pump trillions of dollars into the financial markets to aid short term liquidity.
The Kiwi at one point hit a low of US60.90c - its lowest point since May 2009 - before rebounding a little to trade at US61.43.
US financial markets initially saw the US Government's plans to deal with the outbreak as underwhelming, but heavy selling emerged when the US travel ban was announced.
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Accross the Tasman the Australian sharemarket is also a bloodbath with not a single stock trading in the green inside the top 200 stocks.
The S&P/ASX 200 Index plummeted 346.8 points, or 6.5 per cent, to 4957.8, having dropped more than 7 per cent at the open. The market is now at its lowest level since April 2014.