North American stock markets are set for a morning of selling Friday, as investors fret over the fallout from Dubai's debt crisis.
U.S. exchanges in particular look poised for a significant slide as traders return from the Thanksgiving holiday on Thursday. In pre-market trading, Dow Jones industrial average futures were down 2 per cent, while S&P 500 futures fell 2.5 per cent.
The signals were not as bearish in Canada, where S&P/TSX 60 futures were down about half a percentage point.
In what's already been christened "the Dubai surprise," the emirate of Dubai revealed this week that it needed a six-month reprieve on paying its bills. Its main investment arm, Dubai World, said it would ask creditors for a "standstill" on paying back its $60-billion debt until at least May.
The news gouged world markets on Thursday and struck Asian exchanges hard again on Friday. The main indexes in Hong Kong and South Korea slumped nearly 5 per cent. Hong Kong's Hang Seng ended 1,075.91 points, or 4.8 per cent, lower at 21,134.50, while South Korea's benchmark plummeted 4.7 per cent to 1,524.50. Bank stocks have been particularly vulnerable.
European stocks managed to regain some ground late in their trading session Friday, with bourses from London to Frankfurt up marginally.
The U.S. dollar, meanwhile, gained against almost all major currencies, including the loonie, but fell to a 14-year low against the yen. Crude oil tumbled 6 per cent to $72.39 barrel in New York.