With European sharemarkets plunging overnight, the New Zealand exchange looks set to fall for its 14th session in a row.
The New Zealand exchange's benchmark Top-50 Index closed down 17.44 points, or 0.48 percent, at 3646.91 yesterday.
The index lost 5.4 percent last week including 1.8 percent on Friday. It is off over 10 percent for the year and over 15 percent from its last peak in early October.
Around the world stocks are in freefall, with investors bailing into safe-haven bonds and currencies amid fears that a deteriorating US economy will drag others down with it.
Overnight, the pan-European FTSEurofirst 300 closed down 5.8 percent, taking its 2008 year-to-date losses to more than 15 percent.
Britain's leading shares fell 5.5 percent, suffering the largest one-day loss since September 11, 2001 as the index tracked global markets lower on deepening fears of a possible United States recession.
The FTSE 100 closed down 323.5 points at 5578.2, its lowest close since June 2006 and wiping nearly Stg77 billion ($NZ201.5b) from the value of its constituent stocks.
Britain's blue-chip index has now lost more than 13 percent since the start of the year.
Germany's DAX lost 7 percent overnight and the French CAC 40 dropped almost 7 percent.
Macquarie Equities NZ investment director Arthur Lim said that falls of the magnitude experienced overnight in Europe meant New Zealand markets were definitely going to get hit.
But he did not expect the full impact to become clear until the opening of the Australian market.
The Australian market and the Dow Jones in the US were probably the more important in terms of a flow through effect to this country, Mr Lim said.
The losses on the blue-chip stock indexes of Germany, Britain and France alone overnight amounted to more than $US350 billion ($NZ468b), or roughly the size of the combined economies of New Zealand, Hungary and Singapore.
MSCI's main world stock index, a benchmark gauge of stock markets globally, sank 3.3 percent, falling below its 2007 bottom to lows last seen in December 2006 and taking it down more than 12 percent so far this year.
US stock markets were closed overnight for a holiday, but US stock index futures were down sharply, suggesting investors were not putting much hope on Wall Street leading a rebound when it returned to business.
Elsewhere, Toronto's stock market was down around 4.5 percent and Japan's benchmark Nikkei average earlier lost 3.86 percent to close at a two-year low.
The Australian sharemarket fell nearly 3 percent, extending its longest losing streak in a quarter of a century.