Global markets plunge to historic lows

Renewed fear about the scale of the global recession sent stockmarkets reeling back through the years yesterday.

After Wall Street's S&P 500 hit levels last seen in 1996, other bourses around the world found their own historic lows.

In Japan the market briefly hit levels it traded at in October 1982. The Nikkei later trimmed its losses to end down 0.7 per cent at 7229.72

New Zealand's NZX-50 fell 2.6 per cent to 2418 - a level it last touched in December 2003, when it was starting a rise that peaked in 2007.

"That's a lot of gain, a lot of years wiped off the value of the sharemarket in what you would deem to be a relatively short period," said Hamilton, Hindin, Greene director Grant Williamson. "There's still very few signs of turnarounds in these markets, particularly in America."

The US market's slide overnight on Monday - which took the Dow down 300 points - was nowhere near the largest it has seen since last northern autumn, but the tumble below 7000 was nonetheless painful.

The credit crisis and recession have more than halved the average's value since the record high of over 14,000 in October 2007.

"As bad as things are, they can still get worse, a lot worse," said Bill Strazzullo, market strategist for Bell Curve Trading.

He believes there is a chance the S&P 500 and the Dow will fall back to their 1995 levels. The "game-changer", he says, will be the housing market and whether it can stabilise.

A recovery will also require signs of health among financial companies, but so far this year it is clear that banks and insurance companies' losses are multiplying despite hundreds of billions of dollars in government help.

All the top New Zealand stocks were down yesterday with Fletcher Building and Contact Energy hitting fresh five-year lows. Fletcher Building was down 8c at $5.15 and Contact down 22c at $5.49.

Australian stocks clawed back two-thirds of their losses after the central bank decided to hold interest rates.

The S&P/ASX 200 closed down 30.9 points at 3219.2 after earlier touching a five-year low of 3153.5.

- AGENCIES