The fallout from the Chinese sharemarket rout on Wednesday has spread through to the United States, with American sharemarkets slumping sharply, while billions of dollars were stripped off the value of shares in companies linked to Australian commodities.
While the bourses of Shanghai, Hong Kong, Australia and the New Zealand all started the day down yesterday, they then steadied and slowly retraced losses to mostly move into positive territory by late in the afternoon, New Zealand time.
However, the real fallout for New Zealand could yet materialise from downturns in the economies of China and Australia, the country's two largest trading partners.
Australia has been hit especially hard by plunging iron ore prices, which slumped even further yesterday to a six-year low of $US44.59 ($NZ66) a tonne.
Further unnerving United States investors during the panic from China was a three and a-half hour stoppage during trading on the New York exchange over a technical glitch.
US stocks went on to slump sharply, with the Dow Jones Industrial Average down 1.45%. The broad-based S&P 500 fell 1.65% and the tech-rich Nasdaq Composite shed 1.75%.
Earlier, in China, the CSI300 index of the largest listed companies in Shanghai and Shenzhen closed down 6.8%, while the Shanghai Composite Index dropped 5.9%.
Craigs Investment Partners broker Chris Timms said of 2808 listed Chinese companies, about 45%, or about 1300, had their shares put into a trading halt.
''It marked the largest wave of trading halts in the history of China's equity markets,'' Mr Timms said.
When the NZX opened yesterday, it was shortly afterwards down 1.3%, with ''some nervousness'' being shown by investors, over the combined Greece debt issue and China market rout.
However, Mr Timms was assuring local investors there had been ''no change'' affecting New Zealand-listed companies.
He said that for Australia the further iron ore slump to $US44.59, an almost 30% decline in just 10 days, was causing alarm in the resource sector.
''At below $US50 a tonne, virtually all of Australia's's producers, outside BHP Billiton and Rio Tinto, are rendered unprofitable,'' he said.
The weakness in Australia's economic outlook was reflected in traders exiting the Australian dollar
for the kiwi, which rose against the US dollar from US66.43 to US67.27 on Wednesday.
Mr Timms said if the price slump was prolonged, it could bankrupt smaller ore producers, forcing them to sell assets and close mines.
Unlike other major stock markets dominated by professional money managers, retail investors account for about 85% of China trade, which exacerbates volatility.
China's securities regulator took the drastic step late on Wednesday of ordering shareholders with stakes of more than 5% from selling shares for the next six months in a bid to halt the plunging stock prices.
China had also banned short selling and new listings, and enlisted the help of the major stockbrokers through a 120 billion ($A26 billion) stabilisation fund, AAP reported.
Mr Timms said much of the Chinese selling was linked to calls for repayment on ''margin lending'', where investors had borrowed against the value of their overall share portfolio, to buy more shares.
However, when the market began falling, the lenders called in the loans, and investors had no choice but to sell portfolio stock to raise cash, which further exaggerated the selling environment.
''It [selling] becomes of a bit of a self-fulfilling, vicious cycle,'' Mr Timms said.
He said beginning with China's central bank cutting interest rates three times since November 2014, to kick-start the economy, the ''easy money'' saw the Chinese markets rally 150%, from June last year up until this month.
Many of the Chinese companies which halted trading did so by citing unspecified significant events, asset restructuring or private share placements, but the moves were most likely meant to protect their shares from the ongoing sell-off, Mr Timms said.
Wednesday's China plunge also dragged down the Hong Kong sharemarket, where many of the same companies were also listed, by 4.3%.
- Simon Hartley & Reuters
