KEY POINTS:
The sharemarket fell half a per cent this morning in a holiday-affected market, putting it on track for a record 13th consecutive loss.
After a brief flurry in positive territory, bearish sentiment again prevailed. Downward momentum gathered pace through the morning due to the lack of buyers, brokers said.
By 11.15am, the benchmark top-50 index was down 17.2 points, or 0.5 per cent, to 3647.
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.
On the local market today, market leader Telecom had a choppy session, initally up 3c, then down 4c but then back up to even on 414. No 2 stock Fletcher Building initially rose 10c but fell back to be 1c down on 1000.
Unlike other recent sessions when stocks fell across the board, today's activity was mixed. Nuplex was up 5c to 210 and Steel & Tube, rallying on soaring steel prices, was up 3c to 340. Westpac Bank was up 84c to 3049 while ANZ Bank was up 15c to 3040.
Stock exchange operator NZX was down 35c to 800.
However, red down arrows dominated screens.
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.
Economist and investment adviser Gareth Morgan said it was too late for investors to panic. As with most share market slumps, by the time mum and dad investors woke up to the fact it was happening, the slump had happened.
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.
He advised investors to spread their investments widely.
- NZPA
