NZ shares down 3 per cent

File photo / Paul Estcourt

The local stock exchange is still falling, but one local broker says the overall volume of the sell-off is not huge.

The NZX-50 index is down 96 points, or 3 per cent, at 3,089.

"There's not huge volumes tracking through the market at this stage," said Hamilton Hindin Greene's James Smalley. "It's when you get the really big volumes and the really big falls that you can say people are really pushing the sell button."

He said the main problem was that investors were not buying up the shares that were being sold off.

"Sellers are selling out because of the uncertainty - buyers, because of these big macro events, are seeing no reason to come in on the buy side," said Smalley.

It was impossible to say when the market would bottom out from its fall, Smalley added.

"You find the market bottom when sentiment is so resoundingly negative that basically everyone who wants to sell has sold and there's no more sellers."

Smalley said that even if the market reached that point, a "new bombshell" could cause it to drop further.

This morning's slump following a rout in US equities in the first day of American trading after the unprecedented cut to the US credit rating.

On Wall Street, the Standard & Poor's 500 Index slumped 6.7 per cent as investors fled stocks for the safety of bonds' fixed payments. New Zealand government bonds also rallied, pushing the yield on the benchmark 10-year bond down 7.5 basis points to 4.43 per cent.