The New Zealand sharemarket has fallen sharply today following the rout on international markets at the end of last week.
The benchmark top-50 index has fallen more than 3.1 percent, the biggest single session fall since the start of the pandemic in March 2020.
A large number of investment funds based on US stocks and assets have also slid.
Companies exporting to the US or with significant US assets or income at risk from a slowdown such as tourism are the hardest hit.
Losing stocks outnumber rises by nearly five-to-one.
The falls may be exacerbated when the Australian market opens at midday, with indicators pointing to a fall of more than 4 percent across the Tasman.
Meanwhile, the New Zealand dollar has been on a rollercoaster ride the international markets react to Trump’s shock and awe tariff announcements.
The Kiwi initially gained against the US dollar after tariffs were revealed, but plunged nearly 2 cents to around 55.5 US cents on Friday – the lowest level since the start of this year – as markets digested the news, and as China hit back.
BNZ senior markets strategist Jason Wong said the tariffs were possibly worse than the worst-case-scenario.
China’s retaliatory tariffs played a big part in the Kiwi’s movement, including gains against the Australian dollar, he said.
“In this sort of world where there are a lot of doubts about global growth and China at the forefront, it does tend to have a marked impact on very growth-sensitive currencies like the New Zealand dollar.”
There was potential for the Kiwi to go as low as 55 cents against the greenback, Wong said.
“We think at that level the New Zealand dollar is quite cheap and fundamentally undervalued, so to go beyond the 55-cent mark onto the downside, you’ve got to factor in a more of a crisis situation.”
During the global financial crisis in 2009 the New Zealand dollar fell to 49 cents, but believed the current situation did not feel as bad, Wong said.
