"As we have had reports of the virus spreading all around the globe, it has really got markets rethinking that complacency. What we are see is a very quick adjustment in thinking and that is being reflected in some very heavy selling across the region," McCarthy said.
"We've seen a reversal in global equity market sentiment, which is why we are getting such a belting today across the region too – it's not just New Zealand, everybody is in the red today."
At New Zealand's market close, Australia's S&P/ASX 200 was down 2.1 per cent, Hong Kong's Hang Seng was 1.5 per cent lower and Shanghai's SSEC was down 0.3 per cent.
The NZX was led lower by Air New Zealand, which dropped 5.5 per cent to $2.58 on a volume of 3.5 million shares. The airline today lowered its annual earnings guidance by as much as $75m due to the outbreak reducing travel demand.
Prime Minister Jacinda Ardern today said the ban on travellers from China would be extended for another eight days.
"If this is going to go on longer than we originally thought then those that are most directly exposed to the key industries are the ones most likely to feel the pressure," McCarthy said.
Auckland International Airport fell 3.8 per cent to $8.32 and Tourism Holdings declined 4.2 per cent to $2.72.
Freightways fell 4.9 per cent to $8.05 despite today saying its domestic-focused business was not feeling the effect of the virus outbreak. The company reported flat first-half earnings, but chief executive Mark Troughear said better margins and recovering economic activity made him guardedly optimistic about the outlook.
A2 Milk, which exports to China, declined 4.6 per cent to $15.63 and Synlait Milk fell 4 per cent to $6.56. Fonterra Shareholders' Fund units increased 0.3 per cent to $4.
Gentrack Group declined 3.9 per cent to $2.20 after the sudden resignation of its chief executive was announced today, just three days before its annual general meeting. The stock has fallen 55 per cent in the last 12 months.
Meridian Energy fell 3 per cent to $5.38 on a volume of 957,000 shares. The power company reports first-half earnings on Wednesday, with a key risk around the future of its supply to the Tiwai Point aluminium smelter.
Rio Tinto today reported a $46.2m underlying loss from its New Zealand aluminium smelter at Tiwai Point. The mining company is trying to renegotiate lower power prices and transmission charges.
Chorus was the only stock on the NZX50 to gain more than 1 per cent today, rising 5.6 per cent to $6.73. The company signalled plans to pay bigger dividends after an extended period of constrained returns once it finishes building the bulk of the country's fibre network.
The telecommunications network operator completed the first stage of the ultra-fast broadband network in December, one month ahead of schedule and within the $1.8 billion guidance.
Outside the NZX50, Delegat rose 4.5 per cent to $11.05 after announcing a record sales volume of 1.7 million cases. The winemaker said it was on target to lift annual case sales 8 per cent to 3.2 million.
