The Canadian Press

The Toronto stock market is in for a sharply lower opening in line with other global markets amid a new round of worries about the global financial system.

The concern centres around debt problems at Dubai World, a global investment company owned by the government of Dubai.

Sentiment in stocks has been dented by the news that Dubai World, which is thought to have debts totalling around US$60 billion, has asked creditors if it can postpone its forthcoming payments until May. That has stoked fears of a potential default and contagion around the global financial system, particularly in emerging markets.

“Certainly the Dubai debt debacle and the uncertainty that it has created has had a severe knock on effect,” said David Buik, markets analyst at BGC Partners.

Overseas markets were rattled by the development as the Shanghai index tanked 3.6%, Hong Kong’s Hang Seng shed 1.8% while Japan’s Nikkei 225 stock average fell 0.6%.

London’s FTSE 100 index fell 1.86% and Frankfurt’s DAX dropped 1.8%.

U.S. markets were closed for the Thanksgiving holiday.

The Canadian dollar fell 0.83 of a cent to US94.82¢.

Commodity prices also moved lower in electronic trading. The January crude contract in New York lost 90¢ to US$77.06 a barrel.

The December gold contract moved down $2.30 from Wednesday’s latest record close to US$1,184.70 while December copper edged 3¢ lower to US$3.14 a pound.

The Toronto stock market closed up 97 points Wednesday as oil and metal prices shot up and investors took in positive U.S. consumer and housing data.

Wednesday close: TSX runs ahead as gold, oil surge