NEWS Corporation chief Rupert Murdoch earlier this month hailed his Australian newspapers as "going gangbusters", but that may have been before sales figures for its No. 2 paper reached his desk. News' Sydney tabloid, the Daily Telegraph, took the biggest knock in the Audit Bureau of Circulation's latest quarterly sales report. All three editions fell in the three months to December compared with the same period a year earlier — weekdays down 4.3% to 375,000, Saturdays down 6.7% to 319,000 and the Sunday Telegraph falling 2.1% to 670,000. But rival publisher Fairfax Media — owner of The Age — did not benefit from the falling circulation, with weekday Sydney Morning Herald sales slipping 0.5% to 211,170, the weekend Herald steady at 360,000 and the Sunday Sun-Herald down 2% to 500,000. Daily Telegraph editor David Penberthy conceded it had been "a tough quarter", but said a catalyst was the equine influenza outbreak, which caused NSW horse racing to be suspended.