KEY POINTS:
The New Zealand sharemarket suffered yet another horrid session yesterday, following the latest Wall St rout.
Wall St went into freefall, with major indices falling more than 5 per cent after oil fell sharply, politicians baulked at legislation to extend emergency loans to the teetering US automotive industry,
and jobless claims reached a 16-year high.
The NZX-50 reacted with a 66.57 point, or 2.5 per cent, fall to 2578.10 - its lowest close since May 2004.
Stephen Wright of ASB Securities said pessimism continued to dominate trade. "There should be stocks that are benefiting from the low dollar and low interest rates but nobody cares."
F&P Healthcare, for example, which has already said it is benefiting from the lower exchange rate, was down 3c to $3.05. Among top stocks, Telecom was down 7c to $2.24, Contact Energy was off 41c to $6.39 and Fletcher Building was off 6c to $5.42.
Wright said the gloom was all-pervasive despite some glimmers of hope, including the prospect the retail sector would not be hit as hard with cheaper petrol prices freeing up more of consumers' disposable cash.
Nevertheless, The Warehouse was down 8c to $3.57 and Pumpkin Patch was off 5c at 80c.
Total market turnover, while a bit higher than seen on many days of late, was still fairly modest at $94 million.
The New Zealand dollar was also hit by international recession fears, sinking to fresh six-year lows below US53c yesterday to close at US52.88c.
However, the Australian sharemarket performed a surprise turnaround in the last hour of trade after four consecutive trading days of losses. The S&P/ASX200 index closed up 63.6 points, or 1.9 per cent, at 3416.5.
Most Asian markets rebounded yesterday after days of sharp declines. Japan's Nikkei 225 stock average rose 60.28 points, or 0.8 per cent, to 7763.32 and Hong Kong's Hang Seng index jumped 553.22 points, or 4.5 per cent, to 12.851.78 points. South Korea's Kospi rose 3.7 per cent.
On the down side, China's Shanghai Composite index slipped 0.7 per cent and markets in the Philippines and Indonesia also fell.
The chief economist at fund manager Arcus, Bevan Graham, said crippling uncertainty over whether the US and other major economies would suffer a widespread recession had been overtaken by uncertainty about how deep and how long the recession would be.
That uncertainty was exacerbated by the fact that standard economic models were not being much use in predicting the effects as the current conditions were unprecedented.
"If you knew history was going to repeat you could be a bit more comfortable but the thing is we are in a different environment."