"Putting aside what happened in Paris you would probably expect our market to be down this sort of amount," Williamson said. "Possibly there's a little bit of emotional selling."
The impact of the Paris terrorist attacks on the global markets were expected to be negative, but it may not be long-lasting, said one investment analyst this morning.
Andrew Kelleher, director at investment consulting firm JMIS Ltd, told Newstalk ZB the terrorist attacks would hurt the world markets, but they could bounce back quickly.
The weekend's terrorist attacks in Paris killed 132 people and injured more than 350.
Kelleher said the Paris markets were due to open and would be down. He said the fall would be because of negative sentiment and the effect the attacks would have on day-to-day life.
"People won't go out as much and won't be spending as much and you'll see that right across Europe, I think."
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Kelleher said people could look back to the impact of the July 7 London bombings in 2005 and the Madrid terrorist attack in 2004 to get a sense of what was to come for French markets.
"After the July 7 attacks in London the FTSE dropped 1.4 per cent and we saw interest rates fall a little bit as well, though not substantially.
"The exchange in Madrid post the terror attacks, they actually fell quite a bit further than that. Interestingly, both exchanges recovered their losses quite quickly, within days in the case of London and within a few weeks in Madrid."
Kelleher said the reaction after September 11 was more pronounced, and he didn't believe Paris would suffer a similar reaction.
"Tourism, leisure and insurance, those are the sectors you'll see the most impact on."
US Treasuries and the US Dollar were two areas that tended to be beneficial in periods of uncertainty, he said.
Sam Tuck, senior foreign exchange strategist at ANZ, told Radio New Zealand that risk such as minor currencies and shares would take a knock.
"It will be interesting to see how we go overnight as there is a bit of a mood at the moment around these events that we should not let these sort of things impact our thinking.
"The NZ dollar is unlikely to be bid this morning . . . that is going with the general theme for the NZ dollar at the moment."
Tuck believed the the main reaction in the markets would last a couple of days
"It does wane on sentiment, for instance we have the Federal Reserve in five weeks and this will impact how the markets are thinking in the run up to that."
Meanwhile, investors will scrutinise minutes from the Fed's October meeting, released on Wednesday, as policymakers clearly reminded investors then that the potential of a December hike was firmly on the table. Comments from Fed Chair Janet Yellen and better-than-expected US jobs data have since underpinned that possibility, bolstering the US dollar.
"We have had a strong October jobs report and Yellen herself referring to a December rate rise as a 'live possibility' for the first time," Chris Hare, economist at Investec, told Reuters.
Fed Governor Jerome Powell is set to speak on Tuesday, while New York Fed boss William Dudley, Atlanta Fed chief Dennis Lockhart, and Cleveland Fed President Loretta Mester will be on a panel at a conference on Wednesday. Other Fed officials holding talks this week include the Dallas Fed's Rob Kaplan, also on Wednesday, Lockhart again on Thursday, and St Louis Fed President James Bullard, on Friday.
Investors will get a fresh take on the state of the US housing industry, with reports on the housing market index and housing starts slated for release on Tuesday and Wednesday respectively.
with BusinessDesk
