THE JSE remained in the red, although it was off its earlier worst levels by midday today as global markets await the opening of the US markets later in the afternoon.
US markets were closed for Thanksgiving yesterday and have yet to absorb the news from Dubai that has had global markets jittery since yesterday.
Dubai government-owned investment company Dubai World, which has almost $60bn worth of liabilities, had asked creditors to postpone its forthcoming payments for six months.
At noon the JSE all share index was 1.65% weaker, led by resources, which fell 2.19%, gold miners which gave up 3.41% and platinum miners which declined 1.72%. Banks fell 1.11%, financials dipped 1.37%, and industrials moved 1.20% lower.
The rand was bid at R7.54/$ from R7.48/$ when the JSE closed yesterday. Gold was quoted at $1,157.15 a troy ounce from $1,182.60/oz at the JSE's last close, and platinum was at $1,434/oz, from $1,451/oz the bourse's previous close.
A local trader said that as the Dow was closed yesterday, it will now play catch up to the Dubai news. "The Dow futures indicate that it will go down quite dramatically. Dow futures are currently down 215 points, but that's not as bad as earlier when they were down 300 points," he said.
He said as the Dubai jitters have spilled into other markets, the debt issues are coming to the fore again. He noted that there has been some safe haven retreat to the US dollar, which has subsequently recovered from $1.51 a few days ago to current levels of near $1.49. He added that traders are watching the dollar very closely as should the carry trade in the USD start to unwind, there is a possibility that equity markets could weaken further.
"It's looking a bit overdone, but it's a serious situation and we don't know how long it will impact the markets. But if you look back on this year, every time we had a knock, buyers start to come back into the market, so maybe a shakeout was needed," he added.
He noted that local gold shares were a feature today, with the index down almost 3.5% as the gold price pulled back quite dramatically from all-time highs earlier this week. He added though, that this loss should be kept in perspective as gold counters had run up earlier in the week in the wake of the stronger gold price.
He added that the weaker rand was not even helping the local markets as losses were almost worldwide, including emerging markets.
"We need to see where the Dow ends tonight and then see what happens next week," he concluded.
Dow Jones newswires reported that Asian stock markets slumped today with some suffering their worst losses in months amid concerns about the potential fallout from Dubai World's debt standstill, with bank and construction stocks leading decliners.
Gold and oil prices fell, as did currencies viewed as riskier bets.
Patrick Bennett, Asia rates strategist at Societe Generale added: "Fallout from Dubai World seeking a debt moratorium has been broad. It is not the amount involved but potential contagion that will drive markets."
Japan's Nikkei 225 Average fell 3.2% to 9081.52, its lowest close since July, Hong Kong's Hang Seng Index dropped 4.8% and China's Shanghai Composite lost 2.4%.
Asian markets were tracking the declines made yesterday in Europe after Dubai World, the city state's largest corporate entity, asked creditors for a six-month standstill on debt repayments of $59bn.
Markets were also volatile after the US market holiday yesterday, with Dow Jones Industrial Average futures recently 297 points lower in screen trade.
US stock market futures are trading sharply lower in the wake of a heavy sell-off overnight in Asia due to worries about banks' exposure to Dubai World's debt.
In London, the FTSE100 was off 14 points.
Among equity movers on the JSE, American plc fell R6.60, or 2.07%, to R312.39 and moved R3.78 lower, or 1.65%, to R225.12.
Petrochemicals group dropped R8.01, or 2.7%, to R288.99.
Among gold miners, slipped R9.47, or 2.84%, to R323.53, subsided R4.75, or 4.26%, to R106.85 and Harmony fell R3.19, or 3.8%, to R80.80.
Platinum miner declined R12.97, or 1.74%, to R733.53, Impala Platinum lost R3.30, or 1.9%, to R169.70, Platinum dipped 50 cents, or 1.23%, to R40 and moved R1 lower to R214.
Among industrials on the JSE, was R2.07 weaker, or 2.48%, to R81.33 and gave up R1.75, or 3.61%, to R46.75. Pretoria Portland Cement dropped 67 cents, or 2.14%, to R30.68.
Among banks, was R1.08, or 1.13%, lower to R94.52, declined R2.34, or 2.06%, to R111.30 and was down 52 cents to R123.68.
plc shed 41 cents, or 2.87%, to R13.90.
Construction group Murray and Roberts declined 7 cents to R48.53, recovering from a low for the day of R46.71. Earlier the group pointed to a probable Dubai debt moratorium, having noted the request by Emirate of Dubai state-owned developer Dubai World and its subsidiary Nakheel, for a temporary suspension of debt repayments.
"The only contract to which Murray & Roberts was exposed with Nakheel was Trump Tower. This contract was terminated and all accounts settled in full within the previous financial year," it said.
Telecommunications group gave back 59 cents, or 1.02%, to R57.11, MTN shed R2.16, or 1.85%, to R114.34, and dropped R1.09, or 2.82%, to R37.60.
Elsewhere in the news, mining services and coal-mining group Sentula Mining gave up 24 cents, or 10.3%, to R2.09. The group reported a 78% fall in its first half headline earnings to 15.2 cents a share from 69.6 cents a year ago.
Profit for the six months to end September plummeted 87% to R25 million from R197.3 million for the corresponding period last year.
Revenue decreased 32% to R1.19bn from R1.74bn and operating profit fell 58% to R125.6 million from last year's R296.3 million.
"Sentula, adversely impacted by the global economic environment, has endured extremely difficult trading conditions during the first half of the 2010 financial year and the results, while disappointing were substantially in line with the second half of the 2009 financial year," said Sentula Mining CEO Robin Berry.
Holdings shed R1.54, or 2.23%, to R67.56. The African wealth management group on Friday reported a 29% drop in total new corporate business from R1.5bn to R1.1bn in the nine months to end September 2009.
Total new individual life business slumped 9% to R10.2bn from R11.1bn for the first nine months of last year.
said group operations generally performed satisfactorily over the last quarter, with life cash flows being positive and growth in assets in the group's asset management businesses.