The JSE remained in the red although it was off its earlier worst levels by midday on Friday 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 Thursday.

Dubai government-owned investment company Dubai World, which has almost $60-billion worth of liabilities, had asked creditors to postpone its forthcoming payments for six months.

At noon the JSE all share index was 1.65 percent weaker, led by resources, which fell 2.19 percent, gold miners which gave up 3.41 percent and platinum miners which declined 1.72 percent. Banks fell 1.11 percent, financials dipped 1.37 percent, and industrials moved 1.20 percent lower.

The rand was bid at 7.54 to the dollar, from 7.48 when the JSE closed on Thursday. Gold was quoted at $1157.15 a troy ounce from $1182.60/oz at the JSE's last close, and platinum was at $1434/oz, from $1451/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 percent 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 on Friday 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 percent to 9081.52, its lowest close since July, Hong Kong's Hang Seng Index dropped 4.8 percent and China's Shanghai Composite lost 2.4 percent.

Asian markets were tracking the declines made on Thursday in Europe after Dubai World, the city state's largest corporate entity, asked creditors for a six-month standstill on debt repayments of $59-billion.

Markets were also volatile after the US market holiday Thursday, 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.