A down-and-out Team New Zealand staged an eight-minute turnaround to move within sight of the America's Cup title with a "bizarre" victory over Italy's Luna Rossa on Monday.

After muscling past the Italian challengers to win the day's first race by 58 seconds, the hosts were off their foils and looked well out of contention in the second.

Team New Zealand (L) won both races against Luna Rossa on Monday
Team New Zealand (L) won both races against Luna Rossa on Monday AFP / Gilles Martin-Raget

But the holders pulled off a sensational recovery to finish the day 5-3 up, just two wins from victory in the best-of-13 regatta on Auckland's Waitemata Harbour.

"That was probably the most bizarre race I've ever seen," America's Cup veteran Dean Barker said in commentary.

Team NZ's double energised a regatta which had been deadlocked at 3-3 and criticised as predictable after the boat that crossed the starting line first won all six previous races.

Team NZ helmsman Peter Burling (C) engineered a spectacular turnaround
Team NZ helmsman Peter Burling (C) engineered a spectacular turnaround AFP / Gilles Martin-Raget

The Italians made the better start both times on Wednesday but could not hold on, with the second race proving one of the most dramatic in the event's 151-year history.

Luna Rossa co-helmsman Jimmy Spithill gained a narrow 16-second advantage on the first leg, but Team NZ looked poised to mow them down.

Large crowds gathered to watch the day's racing
Large crowds gathered to watch the day's racing AFP / Gilles Martin-Raget

However, as they moved in for the kill the yacht came off the foiling arms that lift the hull out of the water, belly-flopping to a halt as Luna Rossa raced away.

The Italian's lead extended to a seemingly unassailable four minutes 27 seconds before the light winds struck again, with Luna Rossa this time finding themselves becalmed.

Team New Zealand managed to get back on their foils as Spithill and his frustrated crew mates looked on, with the hosts going on to won by 3mins 55sec.

Team NZ are now two wins from victory
Team NZ are now two wins from victory AFP / Gilles Martin-Raget

Barker, who skippered the unsuccessful US challenger American Magic in the lead-up events in Auckland, was left scratching his head.

"To go from four minutes down to win by four minutes is quite incredible. One botched manoeuvre by Luna Rossa and game over," he said.

Team NZ helmsman Peter Burling praised his crew for never giving up and getting the state-of-the-art vessel flying again in difficult conditions.

"It was obviously a pretty tense day for us, we're really happy with the way we fought back," he said.

"It was a pretty amazing effort by the whole team to get back on the foils and keep charging on."

Spithill was defiant when asked if the regatta had experienced a turning point that had shifted momentum towards the home team.

"It's not over, that's for sure," said the Australian, nicknamed 'Pitbull' for his aggressive tactics and never-say-die attitude.

"There's no one at the base curled up in the corner crying it out -- it's been a tough road to get to this Cup so we know the team can bounce back."

Spithill famously steered Oracle Team USA from 8-1 down to a 9-8 victory over Team NZ in San Francisco in 2013.

With light winds again expected when racing resumes on Tuesday, he was looking for another remarkable comeback, rather than giving Team NZ the two wins they need to seal their defence of the 'Auld Mug'.

"We have to learn, get stronger, and come out swinging," he said.