The Australian futures market indicated that the ASX indices could fall by up to 7% in a day of market turmoil.
The NZX-50 remained down 4% at 12.30pm as a few investors heavily sold off stock in some of New Zealand's largest companies.
However, the sell down was on light volume, indicating that most investors were sitting back watching to see how the next few days unfolded, he said.
``Of significance is our currency falling back sharply as investors flee any of their risky assets, including the New Zealand dollar which is in that category.''
The turmoil came after the United States House of Representatives rejected a compromise plan to bailout the financial industry.
In early trading, Telecom was down 16c, or 5.8%, early to $2.62, Contact Energy was down 34c, or 4.1%, to $7.95 and Fletcher Building lost 36c, of 5.2%, to $6.55.
In the US, the Dow Jones Industrial Average index ended down 777 points, or nearly 7%, in the largest one-day fall ever.
The failure of the Bill, which would have let the US Treasury buy up bad mortgage debt from struggling banks, added to serious concerns after the credit crisis claimed new victims including Wachovia Corp and a host of European banks.
