Wellington - The New Zealand stock market - the first in the world to start trading every day - fell nearly 3 per cent Tuesday morning in the wake of slumps on Wall Street and in London amid the deepening US financial crisis.

The benchmark index of top 50 stocks fell 96 points to 3,223, a drop of 2.8 per cent in the first two-and-a-half hours' trading after opening down 2.2 per cent on Monday night.

Dealers said the New Zealand dollar also took a hammering, dropping to 65.4 US cents, nearly 1.5 cents down on the rate at the end of trading Monday, as US investors reportedly repatriated the greenback.

Finance Minister Michael Cullen said that New Zealand banks remained sound despite the meltdown in US financial stocks.

"It's still very unclear how this will impact upon the wider economy," he told Radio New Zealand. "This is probably the worst financial crisis for a very long time indeed - that doesn't make it the worst economic crisis. The US economy itself is continuing to grow during the current year."

Cullen said the Reserve Bank of New Zealand was monitoring developments closely. (dpa)