Ross Taylor, 50 not out overnight, was brilliantly caught without adding to that total from the fourth ball of the day, which he hit from the middle of the bat directly to Dimuth Karunaratne at short leg.
Tom Latham and Henry Nicholls reasserted New Zealand's control by batting through the remainder of the session, adding 92 to New Zealand's overnight total at Wellington's Basin Reserve.
At lunch Latham was 168 not out, having resumed on 121, while Nicholls was 45. Previously, Jeet Raval made 43 in a 59-run partnership for the first wicket and Kane Williamson made 91 in a 162-run stand for the second.
Taylor and Latham had put on a further 91 when Taylor's promising innings was snuffed out by a remarkable catch. He turned a full delivery from Lahiru Kumara to the leg side, and Kurunaratne, fielding under the helmet and about six meters from the batsman, threw up his hands and grasped the ball at shoulder height.
He juggled the ball at first and was falling back as a defensive reflex as the ball sped towards him but managed to secure the catch at the second attempt.
Nicholls had a let off early when he defended a short ball from Kumara which dropped from the bat and bounced backwards, almost grazing his off stump.
From that point on the batsmen reaffirmed their dominance on a drying pitch which, because of its grass cover, is showing no signs of breaking up.
Latham, though painfully slow in the early stages of his innings, continued to grow in confidence. On 168 at lunch, he was only nine runs from matching his previous highest test score — 177 against the West Indies, also at the Basin Reserve.
Nicholls also looked to have settled in to build a big innings as New Zealand tightened its grip on the game.