JSE in red on Dubai debacle

Johannesburg - The JSE was red across the board in the opening salvo on Friday and could get progressively worse as Europe and then the US markets open, with the latter having been closed for Thanksgiving yesterday.

Markets have reacted negatively to yesterday's news that Dubai government-owned investment company Dubai World, which has almost $60bn worth of liabilities, asked creditors to postpone its forthcoming payments for six months.

Dow futures were already taking a beating on the news.

At 09:15 the JSE all share index was 1.77% weaker, led by resources 2.59% down. Gold miners gave up 2% and platinum miners declined 2.52%.

Banks fell 1.55% lower, financials dipped 1.34%, and industrials moved 0.97% lower.

The rand was bid at 7.54 to the dollar, from 7.48 when the JSE closed on Thursday. Gold was quoted at $1 169.65 a troy ounce from $1 182.60/oz at the JSE's last close, and platinum was at $1 441/oz, from $1 451/oz the bourse's previous close.

A local trader said: "Markets are expected to take a bit of a hammering today because of the announcement from Dubai, and things could even get progressively worse when the FTSE, and then Dow open later today, with Dow futures already taking a beating. Trade volumes are however thin this morning."

Dow Jones newswires reported that European stocks are expected to open lower on Friday, with traders still looking to take the opportunity to book profits on worries about exposure to Dubai World debt. IG Markets calls the FTSE to start down 35 points at 5 159.

"The expectation is for another decent move lower at the open in Europe but it could well end up being something of a waiting game for trade to resume in the US before we get to see if another bout of sustained selling is set to follow," Potter added. On the data front, eurozone confidence indicators are at 12:0.

- I-Net Bridge