Wellington, Nov 7 NZPA - The New Zealand sharemarket continued an unrelenting slide lower today but brokers took heart from a reasonably solid recovery by Telecom.

The benchmark NZSX-50 index closed down 48.484 points, or 1.707 percent, at 2791.646. Volume was worth $49.63 million. There were 15 rises and 55 falls.

Telecom hit a new intraday low of 219 after posting a 34 percent fall in first quarter net earnings to $149 million, while reporting it has not yet experienced a significant impact from the economic downturn. It recovered to be down just a cent at 226 by the close.

James Smalley, a client adviser with Hamilton, Hindin, Greene, said Telecom had strong cashflows and offered a good dividend yield at current levels.

Global markets were down strongly again overnight and today the IMF said the world's developed economies are headed for the first full-year contraction since World War II.

Mr Smalley said the global backdrop was a bigger factor than the election on Saturday, though investors would prefer a clear result from the election.

Foreign investors have generally been selling shares as a response to the financial market turmoil and credit squeeze. They generally do not expect radical policy shifts in an MMP electoral system.

Among the leaders Fletcher Building lost 43c to 568 and Contact Energy gave up 2c to 741.

Sky TV was down 14c to 371, after losing 25c, or 6.1 percent, yesterday following the release of profit guidance for 2009 that was less than analysts' consensus forecast.

NZ Oil & Gas was down 7c to 129, and Sky City down 6c to 312.

Hallenstein Glasson was down 9c to 229, and Fisher & Paykel Appliances dropped 8c to 147. Trustpower was up 4c to 760 and Goodman Fielder rose 2c to 180. Auckland Airport eased 4c to 175 and The Warehouse eased 11c to 390. Pike River Coal was down 8c at 115. Overnight, the FTSEurofirst 300 index of European shares closed down 5.78 percent, led by banks and energy shares.

The MSCI world equity index lost 4.77 percent. Tokyo's Nikkei 225 index closed down 6.53 percent.

US stocks sold off in their worst two-day slide since October 1987 with disappointing corporate outlooks and bleak sales from major retailers fueling fears of a deepening economic downturn.

The Dow Jones industrial average tumbled 4.9 percent, the Standard & Poor's 500 Index sank 5 percent , and the Nasdaq Composite Index fell 4.3 percent.

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