NZX50 slumps almost 5% as coronavirus pandemic triggers global selloff

The Dow Jones Industrial Average in the United States closed 10 per cent lower overnight. Photo / AP

New Zealand shares slumped almost 5 per cent today, as the volatile market recovered some ground as the worsening pandemic triggered a historic global selloff.

The S&P/NZX 50 Index dropped 506.41 points, or 4.9 per cent, to 9,826.86, its lowest close since April. Within the index, 48 stocks fell and two rose. Turnover was $278 million.

Volatile trading saw the local index fall as much as 8 per cent before clawing back some of those losses once Australian markets opened.

Overnight global equity markets crashed as investors became concerned that governments had moved too late to slow the spread of the novel coronavirus.

As fear turned to panic, investors sold off shares unleashing a historic rout on global equities market with the sharpest declines since 1987.

George Carter, managing director of Nikko Asset Management, said the heightened uncertainty saw, many investors were "selling first and thinking later".

"It doesn't mean it is wrong to sell, or to reassess your position, but doing it as a panic reaction because you just want to get out, is often the wrong thing to do."

Michael McCarthy, market analyst at CMC Markets, said the more modest fall on the ASX helped soften the overnight lead from Wall Street.

"When you are the only market that is trading in the world, it is hard to know how hard to panic. So as other markets come online with a more moderate adjustment, that's a good reason to perhaps rethink the initial selling impulse," he said.

The Dow Jones Industrial Average in the United States closed 10 per cent lower overnight, the worst drop since the 1987 'Black Monday' market crash and the S&P 500 fell 9.5 per cent.

The Australian S&P/ASX 200 was trading just 1 per cent lower by the time the Kiwi market closed.

Tourism Holdings led the local market lower, falling 16.7 per cent to $1.95, after the company suspended its guidance following the United States blocking travellers from Europe from entering the country.

The company, which in part rents campervans to European tourists, said in a statement to the NZX that while may reach its estimate of $24m annual net profit, the outlook was too uncertain for that number to remain official guidance.

Air New Zealand declined 12.5 per cent to $1.54 with 4.6 million shares trading hands, four times its 90-day average.

Auckland International Airport fell 7.8 per cent to $6.60, also on four times its average volume, after it slashed its earnings guidance by as much as 22 per cent on the news of the travel-ban. The airport now expects net underlying earnings for the year ending June to be between $210m and $235m.

Cinema technology company Vista Group International fell 14.9 per cent to $2.05. The company recently said disruption to its operations in China would remain until April.

Aged-care providers, which have been out of favour because their elderly residents are the most vulnerable to the coronavirus outbreak, lost further ground today. Oceania Healthcare fell 12.1 per cent to 80 cents, Metlifecare declined 11.8 per cent to $5.90, Summerset Group dropped 10.1 per cent to $5.67, Arvida Group fell 9.7 per cent to $1.31 and Ryman Healthcare fell 9.7 per cent to $11.70.

Australia and New Zealand Banking Group fell 8.2 per cent to $17.50 and Westpac Banking declined 8.1 per cent to $17.

McCarthy said banks are heavily exposed to the broader economy, but have been holding up well throughout previous selloffs. Today's decline may be a reflection that investors expect the economic disruption to last longer than originally thought, he said.