Global finance markets are reacting badly to the developing debt crisis in Europe, with US stocks falling and markets around Asia tumbling in early trading before flattening out later in the day.
Craigs Investment Partners broker Chris Timms said markets had reacted very nervously to the plans for debt restructuring.
Officials had assured markets that the plans would apply only to debt incurred after 2013.
But if a country was already insolvent by then, it would not be able to issue new debt that was lower ranked than the outstanding old debt.
"As long as uncertainty about the plans for debt restructuring persist, markets are likely to remain nervous."
That had forced the European Central Bank to expand its sovereign bond purchase programme again and to support banks in troubled countries, Mr Timms said.
Ireland's Prime Minister rejected calls to put the country's international bail-out to a vote in Parliament, despite criticism that the deal was too costly and unlikely to halt Europe's debt crisis.
Brian Cowen said Ireland had no alternative but to accept the package agreed on Sunday for up to 67.5 billion ($NZ118 billion) in loans from the International Monetary Fund, European Union and others.
"The funding needs of this state are now on a far firmer footing as a result of making this agreement than would have been the case without making this agreement," he told Parliament.
"We have a prospect not only of recovery, but of future purpose."
The euro fell against the US dollar yesterday, after rating agency Standard and Poor's said it was placing its A minus long-term and A-2 short-term ratings on Portugal on credit watch with negative implications.
Investors pushed the euro lower on concerns weak eurozone member states might ultimately be forced to default.
European Union president Jean-Claude Trichet warned that pundits were underestimating the determination of governments to keep the eurozone stable.
However, markets paid little attention, pressuring Portugal, Spain and Italy only days after the EU agreed to the Irish bail-out.
The borrowing costs of countries like Belgium and France also rose as investors looked beyond the eurozone periphery and focused on core founding members of the bloc.
A Reuters survey of 55 leading fund management houses showed United States and United Kingdom investors had reduced their exposure to eurozone bonds last month, piling into equities instead, despite a weakening in global shares.
Markets are already discounting an eventual rescue of Portugal, although the Government in Lisbon denies, as Irish leaders initially did, that the country needs outside aid.
Mr Timms said there would be an ongoing problem of how to deal with countries and companies which lent money to the troubled countries.
"You have to question why when something happens in Ireland, it should result in the Dow going down in the US, which then means the NZX falling.
"From a New Zealand point of view, this will be sentiment driven. Our New Zealand companies have reduced their debt levels, have clean balance sheets and cash flows to pay a hefty dividend."
