Shares fall, dollar rises

Wall St's meltdown on the fading United States economy sent shockwaves across the Pacific that New Zealand could not avoid for a second day.

Shares dropped 1.5 per cent here and Australia had its biggest drop for three months, falling 2 per cent.

Japan hit a two-year low with the Nikkei 225 index down 3.9 per cent.

The slide came as the technology-dominated Nasdaq index suffered another mauling, falling 7 per cent to close 53 per cent below its March 10 closing peak of 5048.

The Dow Jones Industrial Average was also down 2.5 per cent.

But while sharemarkets reeled, the kiwi strengthened, along with other currencies, on the weakening greenback.

It repeatedly tested 44USc and peaked at 44.09USc, closing at 43.91c.