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The sharemarket's longest unbroken losing streak extended to 12 days yesterday as bad news continued to flow out of the troubled US economy and financial markets.
After Wall St's S&P-500 index shed almost 3 per cent overnight Thursday and the Dow slipped 2.5 per cent, the local NZX-50 followed suit, dipping by as much as 2.3 per cent before closing 1.76 per cent lower at 3664.36.
Most top stocks suffered with the notable exception of market leader Telecom, which rose a cent to $4.14 on $40 million in turnover.
Contact Energy fell 25c to $7.50, Fletcher Building was down 19c to $10.01, and Auckland International Airport was down 8c to $2.60.
Australia's ASX-200 closed in the red for the 10th session in a row, the first time for more than 15 years.
However, Japan's Nikkei average recovered from an early dive to end 0.6 per cent higher, lifted by expectations that US President George W. Bush will propose measures to boost the US economy.
Yesterday's drop takes the NZX-50's fall for the year to date to 9.3 per cent, or 15.6 per cent since its peak in October last year.
The wider market has now lost $6.2 billion in value since the start of the year and just over $14 billion since May.
In the US, the Philadelphia Federal Reserve's manufacturing index slid to minus 20.9 from minus 1.6 points in December.
"This data point screams recession," said T.J. Marta, analyst at RBC Capital Markets.
Merrill Lynch stock slumped 10 per cent on a quarterly loss of US$9.8 billion ($12.8 billion) as it wrote off bad real estate investments.
Furthermore US Federal Reserve chairman Ben Bernanke's backing of an economic stimulus plan to revive flagging growth only left investors more unsettled.