The local sharemarket has taken its lead from Wall Street and opened sharply lower.
The benchmark NZX-50 was down 164 points or about a 1.4 percent to 11,598 in early trading.
All leading stocks have fallen with Air New Zealand, Fisher and Paykel Healthcare, Summerset, and Infratil down by more than 2 percent.
US share markets fell as much as 5 percent after stronger-than-expected inflation numbers reinforced expectations of more aggressive Federal Reserve interest rate hikes.
US core inflation rose at an annual rate of 6.3 percent dashing hopes that the easing seen the previous month would continue.
"While the market was hoping to see a second consecutive month of fading inflationary pressure, what we got was signs that inflation was broadening, capturing more of the services sector on the back of an over-stimulated economy," BNZ currency strategist Jason Wong said.
The expectation now is that the Federal Reserve will almost certainly raise its benchmark rate by 75 basis points, with increasing chances it might be a full 1 percentage point.
The New Zealand dollar touched a two-year low of 59.87 US cents as the greenback rose on the Federal Reserve rate outlook.