At tea, New Zealand were 266-8 with Watling on 45 after three hours in the middle and facing 119 deliveries. Matt Henry was not out 15 off 10 balls.
Watling went to the crease with New Zealand in trouble at 119-5, having lost three for 29 runs in the morning session.
The wicketkeeper with six centuries to his name patiently protected his end in partnerships of 51 with Colin de Grandhomme, 33 with Mitchell Santner and 36 with Tim Southee.
He waved his bat at an Imran delivery sailing well wide of the stumps and sent an edge to Sarfraz Ahmed to give the keeper his fourth catch of the innings.
Santner chipped away for 16, including three boundaries before he nicked Sohail Khan to Younis Khan taking his turn at first slip.
Swashbuckling Southee swung at everything, with five boundaries in his 29 off 28 deliveries before he was beaten and bowled by a slower Sohail delivery.
Ross Taylor had added eight to his overnight score when he was caught flat-footed by a Sohail delivery that jagged in, catching an edge to give Ahmed a regulation catch.
Jeet Raval, dropped on four and 40 by Sami Aslam at first slip, progressed to 55 when he nicked Imran Khan to Mohammad Rizwan who had taken up the position beside the wicketkeeper.
Henry Nicholls (13) edged Wahab Riaz to Ahmed to have New Zealand at 119-5, and bringing in Watling to restore substance to the innings.
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