Air New Zealand was the big news at the tail end of a "wild week" with firm selling pressure and extreme volatility, Smith said.
Finance Minister Grant Robertson today said the government's $900m loan would keep the airline afloat, but at the cost of any future dividend payments while any debt is outstanding. The debt can also be converted to equity.
Smith said the national carrier was already off 30 per cent before entering the trading halt and the news it would be hampered with more debt and cancelling its future dividends caused more investors to jump ship.
"New Zealand investors rely on income and look for companies that pay reliable, solid dividends. At the moment, we are seeing leading New Zealand companies cutting their dividends."
Air New Zealand dropped 35.7 per cent to 99 cents with 15.3 million shares changing hands as investors judged the bailout to be too small. The airline started the year at $2.93 and its 90-day trading average is just 1.2 million shares.
Rickey Ward, New Zealand equity manager at JBWere, said the size of the loan was too small given there was speculation that $2 billion-to-$3b was needed.
Synlait Milk led the market higher rising 15.9 per cent to $5.10 after reporting its first-half result yesterday. Profit fell more than expected, but the milk producer held its full-year guidance for the full-year and said there had been no operational impact from the virus outbreak.
A2 Milk rose 6.5 per cent to $16.50, while Fonterra Shareholders' Fund units slipped 0.8 per cent to $3.91.
Smith said some stocks had seen a bounce as investors were buoyed somewhat by stimulus packages, saw value in hard hit stocks.
Vista Group International rose 7.2 per cent to $1.34, bouncing back from a record low yesterday. The cinema software firm announced this afternoon it had cancelled the agreement to acquire a further 14.5 per cent of Visa China. The deal may be revisited once the impact pandemic is "fully understood".
Auckland International Airport bounced 8.9 per cent to $5, although is still down 42.9 per cent this year. About 8 million shares were traded, more than four times its 90-day-average.
Tourism Holdings today cancelled its first-half dividend, slashed director and executive pay and said it is considering leasing campervans as emergency accommodation. The share price increased 12.1 per cent to $1.02.
Kathmandu Holdings fell 11.8 per cent to 97 cents, falling below a dollar for the first time. The retailer's share price has fallen more than 70 per cent this year.
New Zealand Refining Company fell 15.1 per cent to 73 cents, a two-decade low. The fuel manufacturer today said it was focused on reducing its cash spend "immediately and significantly" as crude oil supply surges while demand falls.
Sky Network Television fell 3.6 per cent to 26.5 cents and Spark New Zealand declined 2.7 per cent to $3.81 with 9.4 million shares trading hands.
Fisher & Paykel Healthcare fell 3.1 per cent to 26.61 as investors backed off some of yesterday's rise.
Smith said the respirator manufacturer had been "one of the bright spots this week".
Outside the benchmark index, Steel & Tube Holdings fell 7.1 per cent to 52 cents after cancelling its interim dividend citing the uncertainty of the virus outbreak, despite trading in line with expectations.
Michael Hill International rose 32 per cent, or 8 cents, to 33 cents. The company today announced it will close its Canada store network for a period of two weeks in line with public health guidance. The jeweller also noted a significant reduction of sales in all its markets.
