Wellington, May 7 NZPA - Telecom fell to a new record low of 207 today before recovering to 213 after reporting a drop in earnings on a day equity markets around the globe were in turmoil.

Investors tried to work out what happened when United States stocks plunged 9 percent at one point on Thursday US time, before clawing back to be down just over 3 percent at the close as the New Zealand market prepared to open and absorb an earning report from one of its biggest listings.

Telecom reported a 39 percent fall in third quarter net profit to $97 million, as the company faced increased competition, impacts of the economic slowdown, regulatory issues, and problems with its XT mobile network. The result was seen as disappointing but expected.

The benchmark NZX-50 index closed down 59.078 points, or 1.836 percent, at 3158.846. Turnover was worth $123.5 million. There were 9 rises and 88 falls among the 119 stocks traded. The Australian market rallied strongly off lows.

Grant Williamson, director at Hamilton, Hindin, Greene, said the 37 percent fall in the price of Procter & Gamble shares in the US created panic, but there were reports of trading errors and Asian markets suggested a rebound in the US.

Trading today brought back memories of the share market crash in October 1987 and an uncertainty was likely to continue with results from the UK election indicating a hung parliament and debt-burdened Greece still a problem for Europe.

But pretty much from the local market's open people were bargain hunting. "We were seeing a lot of people come in from the buy side," he said.

Among the leaders, Fletcher Building fell below 800 to close down 20c at 795 and Contact Energy fell 13c to 607. SkyCity closed down 5c at 300 but recovered from the low of 296.

Briscoe Group shares were untraded after reporting a 7.4 percent lift in first quarter sales to $96.8m. Yesterday they closed at 131. Postie Plus fell 3c to 35. The Warehouse fell 7c to 362. Kathmandu fell 7c to 213.

Fisher & Paykel Healthcare dropped 11c to 342, and the appliance stock fell 1c to 63. Air NZ fell 2c to 125 and Auckland Airport fell 3c to 193.

Allied Farmers was unchanged at 7 after saying the properties owned by Hanover Finance had fallen in value.

Guinness Peat Group fell 1c to 88 as it prepared for its annual meeting in London.

Infratil fell 4c to 166 and Nuplex fell 4c to 325. Cavalier Carpets fell 16c to 260 and Abano Healthcare fell 15c to 515.

Smartpay rose 0.2c to 4.1 and Heritage Gold rose 0.4c to 2.8. Pan Pacific Petroleum fell 5c to 31.

In the US, the Dow Jones industrial average ended down 3.2 percent to 10,520.32, the Standard & Poor's 500 Index fell 3.2 percent to 1128.15, and the Nasdaq Composite Index lost 3.4 percent to 2319.64.