KEY POINTS:
Jitters about earnings here and on Wall Street sent shares tumbling 2 per cent today.
"It was a pretty ugly day, fullstop," said UBS managing director Campbell Stuart. "It's tough and we are starting to see the whites of people's eyes."
He said the Reserve Bank was coming under mounting pressure to act sooner rather than later to cut rates to alleviate the pain.
The overnight lead from the United State was negative. US stocks tumbled heavily as investors fretted over the health of corporate America where major companies began reporting their second quarter earnings amid economic uncertainty.
Financial, technology and aviation stocks featured amid a broad selloff that pushed the blue chip Dow Jones Industrial Average down over 2 per cent.
The bearish tone turned even darker here when clothing retailer Hallenstein Glasson warned before the market opened its annual profit after tax would fall by around 30 per cent.
It was initially punished 7 per cent, but actually recovered to end down, just 3.3 per cent, 9c, at 260.
However, brokers argued that when a well managed company such as Hallenstein is hit so hard, others could be in for a rougher ride.
The benchmark NZSX-50 index, which yesterday gained half a per cent, ended off 64.9 points at 3112.6. The NZ-All capital index, which does not include dividends, was near a five-year low.
The infection spread to Australia where, as the local market closed, the market was down 1.4 per cent.
The pain was pretty much across the board other than medical supplies company Ebos, which gained 16c to 436 on light volume, and TrustPower, 10c up at 760.
Other retailers were hit with Pumpkin Patch down 5c to 144, The Warehouse, 7c to 396, Michael Hill down 6c to 78 and Postie Plus off 2c to 40c.
Market leader Telecom fell 14c to 337, while Contact Energy fell 11c to 751 and No 3 stock Fletcher Building 30c to 643.
Other prominent falls included Auckland Airport, 4c to 191, Fisher & Paykel Appliances 3c to 237, Sky City, 8c to 301, Mainfreight, 7c to 299, and Port of Tauranga, 5c to 635.
Air NZ, where it was leaked that senior staff would be on a wage freeze and staff cuts are likely as a counter to soaring fuel costs, gained a cent to 111.
Australian bank stocks listed here took a pounding, with ANZ off 26c at 2364 and Westpac down 87 to 2420. However, brewer Lion Nathan rose 7c to 11.12.
Among the small stocks, recently listed Geneva Finance fell 2c, 16 per cent, to 10c, while ProvencoCadmus fell 3c, 16 per cent, to 20c.
Scott Technology fell 8c to 102, CER Group, 3c to 36c and Renaissance fell 5c to 48.
In the US, the Dow Jones Industrial Average slumped a hefty 236.77 points (2.08 per cent) to close at 11,147.44. The benchmark index is down almost 16 per cent for the year.
The technology-rich Nasdaq composite index shed 59.55 points (2.60 per cent) to 2234.89 and the Standard & Poor's 500 index declined 29.01 points (2.28 per cent) to a close of 1244.69.
- NZPA