Telecom shares lifted from seven-month lows today as investors in this part of the world put worries about the financial health of Dubai World aside.

The benchmark NZSX-50 index closed up 31.086 points, or 1.005 per cent, at 3125.523 after initially opening higher. A rise of nearly 3 per cent in the Australian market and more than 3 per cent in the Japanese market on recoveries in bank stocks set a positive tone.

Turnover in New Zealand was worth $136.58 million and was boosted by large flows in Westpac and Telstra shares. There were 55 rises and 31 falls among the 124 stocks traded.

After closing at 240 on Friday, having dropped as far as 238 during the day, Telecom shares were up 6c to 246.

Methven shares gained 11c to 160 after the company reported underlying half-year net profit down 3.2 per cent to $4.2 million.

The company said the result was better than forecast, with a solid reduction in debt levels by reducing working capital and generating creditable group profitability.

But Fisher & Paykel Appliances continued to pay for disappointing investors with its interim last week. Its shares were down 2c at 58.

"Today there is relief that Dubai is not worse. The market does not regard the Dubai situation is as serious as it did on Friday for whatever reason," Stephen Wright at ASB Securities.

He said investors were still fearful but the New Zealand market had not been as volatile as other markets.

"Everywhere in the world liquidity is lower," he said.

Fletcher Building rose 11c to 784, helped by news that the number of new dwellings authorised in October was at its highest level in 15 months, when volatile apartment numbers are excluded.

NZX fell 4c to 784 on a day it announced the purchase of Australian Crop Forecasters, which publishes monthly subscription reports on Australian grain supply and demand.

Infratil rose 7c to 163 on a day it said it was fully supportive of a new bid for Energy Developments in Australia.

The Warehouse rose 11c to 416, Freightways rose 5c to 317 and SkyCity rose 7c to 342.

ANZ rose 60c to 2785 and Westpac rose 100 to 3050.

Auckland Airport, which completed a bond sale today, rose 1c to 186.

Contact rose 2c to 586 but TrustPower fell 20c to 730.

APN fell 13c to 305 and Mainfreight fell 5c to 550.

In the United States, stocks tumbled on Friday as concerns about the Dubai situation ripped through world markets and served as a reminder of how fragile the financial system remains a year after it nearly collapsed.

The Dow Jones industrial index fell 1.5 per cent to 10,309.92, the broader Standard & Poor's 500 index fell 1.7 per cent to 1091.49, and the Nasdaq composite index fell 1.7 per cent to 2138.44.

For the week, the Dow slipped 0.1 per cent, breaking a three-week winning streak. The S&P 500 index rose less than 0.1 per cent and the Nasdaq fell 0.4 per cent.