KEY POINTS:
As recession fears shook world markets the New Zealand dollar sank to six-year lows today.
Against an overwhelmingly bleak backdrop the NZ dollar touched US52c during its domestic session, dealers said.
It climbed slightly to sit at US52.88c at 5pm from US54.09c at the same time yesterday.
The NZX50 was also down by 67 points, or 2.5 per cent, to 2578 after all three major US stock indexes ended sharply lower due to deepening economic fears and investors' flight from risk.
"It is very hard to swim against the tide when you are continually taking the lead from offshore," said David Price of Forsyth Barr.
"A lot of companies haven't been giving guidance and some are reporting below expectations."
Investors sought shelter in safe assets such as US Treasury bonds, and the US dollar slumped versus the yen, but both rose against the euro.
In other bad news, the number of Americans filing for jobless benefits spiked to a 16-year high of 542,000 last week and equity markets in Asia also plunged.
Back home, Fonterra slashed its forecast payout to dairy farmers.
Fonterra CEO Andrew Ferrier said it was moving through the usual pricing cycle much quicker than usual. "It was expected, but it's happening in a much more significant way, driven by the whole global downturn," he said.
Given current conditions demand was unlikely to recover by mid-2009, as was initially expected.
Federated Farmers' Willy Leferink reacted to today's news by saying the world economic situation is so unusual and so debilitating to trade that Fonterra's announcement at least gives some certainty.
"The one message dairy farmers have from this announcement is to tighten our belts and not look for any immediate rebound," he said.
Currency, markets
In other currency news, by today's local close the kiwi was at 49.95 yen, down from 51.70 yesterday.
Against the euro it was at 0.4248 from 0.4325 yesterday.
Across the Tasman, the Reserve Bank of Australia intervened to support the Australian dollar.
The NZ dollar was at A85.65c at 5pm from A84.78c yesterday.
The trade-weighted index was down to 54.63 at 5pm from 55.51 at 5pm.
On the day's trading in New Zealand, ANZ is down 85c to $14.65, Contact is down 41c to $6.39, Mainfreight is down 11c to $4.21, Nuplex is down 20c to $4.55, Sky City is down 11c to $2.97 and Westpac is down 30c to $18.40.
Cavalier is up 5c to $2.10, Hallenstein Glasson is up 5c to $2.28, Rakon is up 3c to $1.03, Ryman is up 5c to $1.40 and Vector is up 2c to $1.95.
- NZPA, NEWSTALK ZB
