New Zealand was not immune from the jitters that spread through markets today, as debt-laden Greece edged ever closer to a default and a potential exit from the eurozone.
Analysts say things are likely to get worse before they get better.
New Zealand's S&P/NZX50 fell to a five-month low, closing down 0.86% at 5705.810, while Australia's S&P/ASX200 was down 2.1% tonight.
Asian stock indices took even steeper falls.
Hong Kong's Hang Seng index had fallen 3% by this evening, while China's Shenzhen Composite, which is rapidly giving up its meteoric gains of the past year, had plunged almost 8%. In Japan, the Nikkei was also down.
Greece's five-year financial crisis took its most dramatic turn yet, with the cabinet deciding that Greek banks would remain shut for six business days and restrictions imposed on cash withdrawals.
The Athens Stock Exchange was closed today.
The moves were introduced to staunch the flow of money out of Greek banks and spur the country's creditors to offer concessions before a bailout programme expires on Wednesday.
The accelerating crisis has thrown into question Greece's financial future and continued membership in the 19-nation shared euro currency.
Craigs Investment Partners head of private wealth research, Mark Lister, said Europe was in better economic shape, economically, to deal with the fallout from Greece than it had been in the past.
"But the risks are still plentiful," he said. "If it gets worse we will feel the heat, for sure, but in a more modest way than European sharemarkets."
Lister said the market volatility was likely to continue for the rest of this week and into the next. "It's looking pretty bleak."
After Greece's current bailout expires, the €7.2 billion euros remaining in it will no longer be available.
Without those funds, Greece is unlikely to be able to pay a €1.6 billion-euro International Monetary Fund debt repayment.
In the referendum set for next Sunday, the Greek Government is urging its citizens to vote against its creditors' proposals, arguing that they are humiliating and that they would prolong the country's financial woes.
"There's a bit of uncertainty as to how this all going to play out and the markets obviously hate that uncertainty," said Grant Williamson, of sharebrokers Hamilton Hindin Greene. "Until that uncertainty is removed then markets are likely to be trending downwards."
Australian bank shares were particularly hard hit in today's rout.
- NZ Herald and agencies
