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FTSE 100 to extend losses on Dubai debt concerns, oil and metals fall

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Overview: the FTSE 100 is set to continue its freefall today with financial bookmakers projecting it to give away a further 1.5% in early trade after shedding 3% yesterday to hit a three week closing low with just three blue chip companies ending the day above the opening level. The markets switched to selling mode after Dubai’s conglomerate Dubai World decided to delay paying off some of its debts, which currently amount to c.£60 million.

Utility companies Severn Trent (LSE: SVT), which advanced almost 4%, and United Utilities (LSE: UU), which posted a small gain, were buoyant after regulator Ofwat decided to cut the average bill by just £3 until 2015. They were later jointed by car insurer Prudential (LSE: PRU), which also rose marginally.

Financial stocks were the heaviest fallers with banking group Barclays (LSE: BARC) shedding 8%, while Royal Bank of Scotland (LSE: RBS) and insurer Legal & General (LSE: LGEN) pulled back about 7.5%. Miners also were in decline as metal prices fell, causing Xstrata (LSE: XTA) and Kazakhmys (LSE: KAZ) to shed more than 6%.

Asian markets were bearish today with Hong Kong’s Hang Seng mirroring yesterday’s losses in London and shedding more than 3%, while Japan’s Nikkei tumbled 2% to hit a four-month closing low. China’s Shanghai composite index was down 2.2%.

Oil prices declined with January Brent Crude falling to US$75.86/barrel, while US light, sweet crude for January delivery slid to US$74.40/barrel.

Precious and base metals also were in decline. Gold fell to US$1,163/oz, while silver and platinum slid to US$17.88/oz and US$1,437/oz respectively.

Copper and nickel retreated to US$3.05/lb and US$7.28/lb respectively as zinc slipped below US$1/lb.

The US stock market will resume trading today after the Thanksgiving holiday.

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