New zealand became the world's top-ranked test nation for the first time with a dramatic victory after a stunning collapse by pakistan in the final session of the first test in mount maunganui on wednesday.

Resuming on 71 for three in pursuit of an unlikely 373 to win, the visitors lost only one wicket through two-and-a-half sessions, moving to 240 for four in the last session with 25 overs left.

New zealand not only took a 1-0 lead in the two-match series but earned enough rankings points to topple neighbours australia from the top of the icc's test rankings.

New zealand have a chance to enhance their status in the second test from january 2, while australia has two tests left of their current home series against india, having lost today's game by 8 wickets.