KEY POINTS:
Brokers and investment analysts are still playing down the slide in the sharemarket, but the trend is undeniable as the NZX has opened lower yet again this morning - its incredible 11th straight session of losses in a row.
At midday the NZX50 had fallen 32 points to 3,721.
The 11-day losing streak is the longest in the history of the NZSX-50.
Investors have seen $4.6 billion wiped off the value of their shares this year as world markets display nervousness about the international credit crisis and fear of a United States recession.
The New Zealand sharemarket's decline - which continued for the 10th session in a row yesterday - has been due for some time, market watchers say.
After another shocker on Wall St where the broad market Standard & Poor's shed 2.49 per cent on a weaker consumer spending report and a big sub-prime writeoff by Citigroup, the NZX-50 shed 58 points or 1.55 per cent to close at a fresh 15 month low of 3752.4. This takes its year to date decline to just over 7 per cent.
"The Australasian markets have become somewhat overvalued," said Paul Glass of Brook Asset Management.
"They've had five excellent years of returns and it was probably time for a correction and some profit taking.
"In the same way we've seen credit markets move to sensibly price credit risk, it's actually quite good to see the stock markets have a little bit of a clean out as well. Better quality businesses will continue to prosper and lower quality businesses will struggle.
"I personally would call it healthy. For the last six months we've felt markets have got too far ahead of themselves."
ABN Amro Craigs retail adviser Nigel Scott noted that price movements appeared "relatively controlled" albeit fairly rapid.
"This is really continuing from what we saw last year, international investors are still reorganising their funds. The key thing here would also be global redemptions, people pulling money out of fund managers or requiring money for other markets or other opportunities."
Furthermore, there was little sign of panic among local retail investors.
"Certainly we're still seeing a few "get me out" orders but not every 10 seconds."
In fact there had been "a little bit of net buying starting to occur" among stocks that investors believed had been oversold. Looking across the market, Scott said other than Telecom which closed 4c lower at $4.14, the market hadn't moved on huge volume.
Other moves among top stocks included Contact Energy down 7c at $7.97, Fletcher Building down 26c at $10.30, Fisher & Paykel Appliances down 12c at $2.88, Methven down 16c at $1.80 and Rakon down 13c at $3.38.
Total turnover for the day was again relatively light at $89.56 million.
Goldman Sachs JBWere economist Shamubeel Eaqub said yesterday's losses were driven by the impact of a general loss of confidence among international investors.
"What we're seeing across the global equity markets is that we've moved on past the bull phase when people were very optimistic on multiples and growth prospects and people were willing to take on a fair bit of risk in their portfolios.
"But now that there are many more visible risks out there, those risk exposures are being pared back and, don't forget, New Zealand is a high debt economy and market.
However, he said it was important not to overstate the situation.
"We're approaching what would be called a correction rather than a crash."
AMP Capital Investors head of equities Guy Elliffe said another factor that was likely weighing on the market was an easing in takeover or other corporate activity.
"A number of the corporate transactions that have been on the table seem to be under some sort of risk.
"We talked quite a bit over the last year that corporate activity was a pretty decent underpinning to the market.
"Our market has come under pressure over the last month or two as investors with a view that those transactions would be completed unwound some of those positions."
AROUND THE WORLD
New Zealand: NZX-50 down 1.55 per cent.
Australia: ASX-200 down 2.52 per cent.
US: Dow Jones industrial average down 2.17 per cent. Standard & Poor's 500 down 2.49 per cent.
Asia: Nikkei 225 stock average down 3.4 per cent. Hong Kong's Hang Seng down 2.4 per cent per cent .
UK: FTSE 100 index expected to open about 0.4 per cent lower in trading overnight.
