Matthew Goodson, director of Salt Funds Management, said the absence of a growth target showed China was facing the same uncertainty as the rest of the global economy, unnerving investors.
"That has seen US futures off about 0.8 to 1 per cent and the Australian market off 0.7 per cent, but as always we tend to march to the beat of our own drum," he said.
Hong Kong's Hang Seng also took a tumble, down 4.6 per cent, as Beijing announced it would impose a new security law on the semi-autonomous city, heightening the risk of more protests and straining the already tense relationship between the US and China.
Goodson said while hostility between the world's two biggest economies was not centre stage on the market, it was increasingly becoming a factor in the lead up to the US presidential election in November.
Stephen Innes, chief global markets strategist at AxiCorp, said rising tension between the US and China had compounded investors' worries about the pace of the economic recovery from the coronavirus pandemic.
Freightways led the local market lower, falling 3.3 per cent to $6.82. The logistics company is sensitive to the amount of activity in the domestic economy.
Last week the government's annual budget allocated state-owned rival, New Zealand Post $130 million and another $150 million of additional capital. Freightways chief executive Mark Troughear told BusinessDesk the firm believed NZ Post was pricing below the cost of providing its courier and mail services.
Mainfreight, a more global oriented logistic company due to report earnings next week, declined 2.1 per cent to $35.55.
Kiwi Property Group is also expected to report next week, its share price held at 94 cents.
New Zealand Refining Company dropped 2.7 per cent to 71 cents. The refiner is stopping production at its Marsden Point oil refinery for several weeks from late July to help clear surplus fuel stocks which have built up during the national lockdown.
National fuel demand fell by about 80 per cent when the country went into lockdown late March to contain the spread of covid-19 and the plant has been operating at about half capacity the past two months.
Fuel retailer and refinery shareholder, Z Energy, declined 1.1 per cent to $2.80.
Goodson said the stock has been performing weekly since it raised $290 million last week. The stock is trading below the $2.90 placement price.
Infratil rose 3.1 per cent to $4.71 as investors cottoned onto the news CDC Data Centres - an Australian company the infrastructure investment firm holds a 40 per cent stake in - is expanding its successful business into New Zealand.
"The market didn't really respond yesterday when it was announced but is responding with a lag today," Goodson said.
"CDC Data Centres has by far the best growth prospects of any of the Infratil businesses, with Trustpower being very mature and Wellington Airport having some unfortunate issues."
Trustpower rose 2.3 per cent to $7.08 ahead of its annual result next week.
Spark New Zealand recovered 2.4 per cent to $4.52 after being aggressively sold down yesterday.
Outside the NZX 50 index, Eftpos provider Smartpay Holdings climbed 5.4 per cent to 49 cents. The company raised A$13 million from institutional investors in an over-subscribed offer to support its growth in Australia and New Zealand.
