U.S. Indexes Drop 1.5%; Dubai Worries

123jump.com Staff
27 Nov, 2009
New York City

U.S stocks trade lower tracking losses in Asia and Europe. The three popular indexes the Dow, the S&P 500 and the Nasdaq lost 1.5%. Gold dropped 1.4% and crude oil declined 4%. Investors are rattled as Dubai reschedules $10 billion of debt and seek a better understanding of off-balance sheet debt.

[R]10:30 AM New York – U.S stocks trade lower and track losses in Asia and Europe. The three popular indexes the Dow, the S&P 500 and the Nasdaq lost 1.5%. Gold dropped 1.4% and crude oil declined 4%. Investors are rattled as Dubai reschedules $10 billion of debt and seek a better understanding of off-balance sheet debts of the Persian Gulf nation.[/R]

World markets and especially emerging markets are focused on how Persian Gulf nation Dubai, UAE handles its latest financial crisis.

Emerging markets in Asia and Europe declined between 1% and 3% and frontier markets in the Gulf region fell by 2% or more.

Dubai World subsidiary Nakheel PJSC is forced to rollover most if its debt that is due in the next three months. Approximately $7 billion is due in November and $10 billion is due in the first quarter of 2010.

Dubai World, though an independent company is partly guaranteed by the state and some have raised the issue of sovereign default, however most analysts in the region downplay the likelihood.

However, emerging markets investors are jittery after more than 40% gains in benchmark indexes this year. Investors are locking their gains will only five weeks of trading left this year.

U.S. indexed declined after one hour of trading and oil, gold and dollar edged lower.

The three popular indexes Dow Jones Industrial Average, S&P 500 and Nasdaq lost 1.5%.

Crude oil decreased 4% to $74.87 and gold dropped $17.60 to $1,171 an ounce and natural gas edged lower 4% to $4.97 per mBtu.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 301.72 or 3.22% to 9,081.52, and Hang Seng index in Hong Kong decreased 1,075.91 or 4.84% to 21,134.50, and CSI 300 index in China lower 103.26 or 2.96% to 3,382.51. ASX 200 index in Australia decreased 136.50 or 2.90% to 4,572.10. Markets in Malaysia were closed today.

The Kospi Index in South Korea decreased 75.02 or 4.69% to close at 1,524.50. SET index in Thailand closed lower 5.36 or 0.78% to 680.37. The Sensex index in India decreased 222.92 or 1.32% to 16,632.01. The markets in Indonesia were closed today.

Europe Markets Review

In London FTSE 100 Index traded lower 17.29 or 0.33% to 5,176.84, in Paris CAC 40 Index decreased 9.26 or 0.25% to 3,669.97 and in Frankfurt DAX index traded lower 21.12 or 0.38% to 5,593.05. In Zurich trading SMI decreased 23.14 or 0.37% to 6,260.24.