Just 26 overs have been bowled since the start of the second day, with the Black Caps extending their lead from 117 to 175 in that time, losing only Kane Williamson in the process.
His overnight partner Nicholls progressed to 49 not out with Watling on 17 when rain again sent the players indoors for a second time - midway through the second session of the day-night Test.
Earlier, Kane Williamson snared a special slice of New Zealand cricketing history.
As a result, the 27-year-old Tauranga native surpassed the legendary Martin Crowe as New Zealand's all-time Test century scorer, a 23-year-old record. After an hour, the rain returned and persisted long enough for play to be called off.
Rain, however, forced them off after about an hour's play in the middle session and while the umpires had expected to resume under lights at 7 p.m., another downpour arrived just as the players were emerging from the changing rooms.
Because of the weather disruptions, play has been extended by 30 minutes at the end of the day, conditions permitting.
A lot more rain is forecast for days three and four, which will give England a chance of scraping a draw. Williamson perished soon after the resumption of play as he was trapped in front by a vicious in-swinger by James Anderson.
"Given the situation we're in, the rain isn't the worst thing in the world for us", he told BBC Sport.
"We came to the ground today fully focused on bowling them out, knowing the new ball was around the corner, focusing on trying to pitch the ball up".
"The situation we're in, though, we'll take a shortened day".
England were using an old ball in the only play under lights so far, on Thursday evening, but were risky enough to suggest the Black Caps could prosper in such a situation.
It's been a tough summer for England with the red ball, starting their two-Test series on Kiwi soil poorly and losing 4-0 to Australia in the Ashes.
"There's still a bit of work to be done".
"We have to keep believing".
"At one stage Paul Reiffel said it's not round but it's going through the hoops".
Moeen Ali bowled five balls of off spin to begin the day, finishing the over he began around 4.45pm on Saturday, conceding a single to a Watling sweep.