The NZX-50 yesterday tested new lows, following the lead of the Dow Jones Industrial index which fell to a six-year low as United States bank shares plunged on investor fears.
The NZX-50 closed down 40 points at 2576.
US bank shares reached a 17-year low on concerns they could be nationalised by the new President Barack Obama's administration, and a rise in the number of people receiving jobless benefits to a record high stoked worries about the deepening recession.
"It's not pretty out there," Forsyth Barr broker Peter Young said. "All the news is bad. There is indiscriminate selling across the board on all indices. Every stock seems to be getting hammered."
There was growing concern that the recession would be deeper and longer than first expected.
That was worrying investors, although some of them were simply reacting to the bad news being released by companies this week.
Oceana Gold shares fell 26% in value after the gold miner released its latest report.
Contact shares fell to a four-year low during the day.
However, trading volume was light and there were buyers prepared to take on the shares being dumped by other investors, he said.
Some stocks could be seen as cheap buying but they needed to be investigated fully, especially around their cash and debt levels.
The US futures market was down nearly 1% by 5pm, indicating that it would be another bad night in US trading, Mr Young said.
In the US, the blue chip indices blew through the November 20 bear market closing low to erase a year-end rally built on hopes a new president would sucessfully tackle the deepening recession.
The Nasdaq fared the worst after a disppointing outlook from Hewlett-Packard set its stock down nearly 8% and dragged down other technology shares.
The Dow lost 1.9% but since the start of the year, it has fallen nearly 15%.
The broader Standard & Poor's has lost 14% since the start of the year.
