New Zealand shares closed lower on Monday as all Asian markets saw losses after peace talks between the US and Iran failed during the weekend.
The S&P/NZX 50 Index fell 1.22% or 161.26 points to close at 13,020.18.
US President Donald Trump warned on social media that the US Navy would immediately begin blockading all ships attempting to enter or leave the Strait of Hormuz after a failed talk with Iran.
The US military said it will begin a blockade of all maritime traffic entering and exiting Iranian ports and coastal areas on Monday.
"The market is now largely back to conditions before the ceasefire, except now the US will block the remaining up to (2 million barrels) Iranian-linked flows through the Strait of Hormuz as well," said MST Marquee analyst Saul Kavonic, as quoted by Reuters.
"The key remaining question is if the US renews strikes on Iran, raising the risk of strikes on energy infrastructure across the region, which could have a further lasting impact beyond the duration of the war," Kavonic added.
In domestic news, the Reserve Bank of New Zealand (RBNZ) is now expected to consecutively increase the official cash rate three times by 25 basis points in July, September, and October, taking the policy rate to 3%, according to a report by ANZ.
Also, New Zealand's fuel spending jumped a massive 15% month-on-month in March as prices surged, siphoning a large amount of cash from households' wallets and weighing on spending in other areas, said Westpac.
Further, New Zealand's services sector shrank in March, posting its third consecutive monthly decline as the conflict in the Middle East impacted consumer confidence, with discretionary spending hit particularly hard, BusinessNZ said.
In corporate news, Fonterra Co-operative Group's (NZE:FCG) roughly NZ$3.2 billion capital return to shareholders was implemented on April 10.
Synlait Milk (NZE:SML, ASX:SM1) said it implemented enhanced testing earlier this year for all infant formula products, which resulted in extended release times and also had an impact on working capital requirements.