The S&P NZX 50 dropped by 4 percent on opening on Tuesday morning and at 11am, was down by 4.65 percent.
The powerful double whammy of coronavirus and tumbling oil prices rocked Wall Street overnight, with the Dow Jones Industrial Average dropping by 7.78 percent (2,013.45 points) to 23,851.33. The S&P 500 dropped by 7.60 percent (225.81 points) to 2,746.56 and the NASDAQ Composite dropping by 7.29 percent (627.94 points) to 7,950.68.
In Europe, drops were around 7-to-8 percent overnight, Japan's Nikkei 225 fell by 5.07 percent and the UK FTSE fell by 7.7 percent. Asia is due to play catch up upon Tuesday's opening.
Talking to Reuters, Peter Cardillo, chief market economist at New York-based Spartan Capital Securities said that Monday's drops were the result of "a lot of fear in the market."
"If the price of oil continues to move lower it's an indication that a global recession is not far away," Cardillo said.
The Dow came about a 10th of a percent from confirming a bear market: 20 percent below its record peak. The S&P 500 closed around 19 percent below its all-time high of 19 February, Reuters said.
Mike Shirley, senior trader at Kiwibank said that the stock market is a "sea of red."
"In terms of equity and bond moves, noone has seen anything like this since the height of the GFC," Shirley said.
Explaining that investors are making a "flight to safety", Shirley said that the huge falls are a result of investors selling risk assets and buying assets they perceive as 'safe', like US Treasury Bonds.
"The reality is that bond prices are going up, yields are going down.
"In aggregate, the market said 'I don't know what's happening and I'm panicked' - everyone else is selling so I should sell as well," Shirley said.
"Overnight, all of the currencies went up, which partly explains why the NZ Dollar traded at US 64.5c overnight."
Referring to the drops both locally and overseas as a result of coronavirus and oil prices, Mark Lister, head of private wealth research at Craigs Investment Partners, called it an "ugly day across-the-board."
"To put the correction in perspective, the NZX is down 12 percent from its peak two-and-a-half weeks' ago," Lister said.
"'Weaker stocks', such as Air New Zealand (down 37 percent this year), Tourism holdings, Sky City and the New Zealand Refining Company, are feeling the brunt," Lister explained.
At 11am on Tuesday, Air New Zealand was down by around 6 percent, Tourism Holdings by 4.8 percent and The New Zealand Refining Company by 4.7 percent.
Partially insulated by domestic travel, at 11am, Auckland Airport was down by 4 percent.
Among the stocks that, although down on Tuesday have held up this year include Spark, Fisher & Paykel Healthcare, Chorus, a2 Milk and property trusts.
"Since the start [of 2020], a2 Milk is up by 4 percent.
"Fisher & Paykel Healthcare is up almost 14 percent this year," Lister added.