KEY POINTS:
The sharemarket notched up its 13th consecutive fall today but managed to outperform a plunging Australian sharemarket.
The benchmark top-50 index closed down 17.44 points, or 0.48 per cent, at 3646.91. It was a better performance than the Australian market which at one point was down 2 per cent and Tokyo which was briefly down 3 per cent.
Blue chip stocks felt the pressure. Contact Energy was one of the big losers, falling 22c to 728.
Telecom was down 5c at 409 and Fletcher Building was down 1c at 1000.
"There was further weakness today in reaction to the Dow Jones being off again on Friday night," said Grant Williamson, partner at Hamilton Hindin Greene.
He said the sellers were in control as there were not many buyers.
"The market is certainly in a downtrend and when it gets like this it is very difficult to turn that trend around," he said.
The index lost 5.4 per cent last week including 1.8 per cent on Friday. It is off over 10 per cent for the year and over 15 per cent from its last peak in early October.
Goldman Sachs JBWere broker Peter Sigley said volumes were "incredibly light" due to the Wellington regional holiday and the long holiday weekend in the United States.
"There's a few running for the door, but most people are just sitting tight looking for bargains but not quite brave enough to have a go at them yet," he said.
The tone of the local market was set by Wall Street on Friday where stocks fell on worries that a White House plan of US$150 billion ($200 billion) to boost the US economy may not prevent a recession.
"The fear is that the plan, and even the Fed, may not have enough firepower to turn the path to recession around," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research in Cincinnati.
The blue chip Dow Jones industrial average fell half a per cent. The US is having a long weekend for the Martin Luther King Day holiday.
Mr Williamson said the New Zealand market was now in an oversold position and he expected a bounce back in the next couple of days.
The Australian market had fallen further because it had more finance stocks which investors are shunning as they try to work out the extent and impact of the financial woes in the US.
Unlike other recent sessions when stocks fell across the board, today's activity was mixed.
There were 35 rises and 64 falls among the 141 stocks traded worth a total $85.19 million.
Port of Tauranga was down 5c at 615, Auckland Airport was down 6c at 254 and Air NZ was down 2c at 173. Fisher & Paykel Healthcare was down 4c at 315, and Mainfreight was down 8c at 293.
But Fisher and Paykel Appliances was up 11c at 315, Infratil was up 5c at 255 and The Warehouse was up 5c at 550.
Tourism Holdings was down 2c at 192 and Freightways was down 3c at 330.
NZ stock exchange chief executive Mark Weldon told Radio New Zealand today before the market reopened that there was no sign "at this point that there's any rot setting in".
No conclusion could be drawn on the state of the local corporate sector.
"We've got to wait until February and see what's happening domestically in the corporate sector here," he said.
However, sentiment is being driven by Wall Street due to fear of recession in the US.
Share commentator Brian Gaynor of Milford Asset Management said while some investors had over-borrowed and over-invested in property, the situation in New Zealand, particularly in regard to banks, was nothing like the United States.
- NZPA