Bank hammered 3pc on Dubai worries

SHARES have plunged in the wake of the government of Dubai asking for a six-month debt moratorium for its investment vehicle, Dubai World. At 12pm AEDT, the benchmark S&P/ASX200 index was down 115.8 points, or 2.46 per cent, at 4592.80 points, while the broader All Ordinaries index had fallen 112.2 points, or 2.37 per cent, to 4615.4 points.

Macquarie Private Wealth associate director Lucinda Chan said the news had "shocked" the market following what had been a good recovery in markets worldwide from the global financial crisis.

Ms Chan siad it was important to determine the exposure of Australian companies to the moratorium before reacting.

"This is a black Friday for investors," Ms Chan said.

"It's been a blow to market sentiment and confidence has been shaken.

"I'm not going to pre-empt that it may be as serious as a default, but we do need to know how much exposure companies have and whose debts these are.

"Right now, we all have to look at how the Dubai government gets out of it and whether the banks will help them out.''

The major banks all were down by more than three per cent.

Commonwealth Bank fell $1.65, or 3.15 per cent, to $50.73, ANZ was down 71 cents, or 3.23 per cent, at $21.27, Westpac dropped 83 cents, or 3.45 per cent, to $23.22 and National Australia Bank lost 94 cents, or 3.34 per cent, to $27.19.

Austock Securities senior client adviser Michael Heffernan said the market wasn't too upset and he was confident that Dubai would not default.

We have no Dubai World exposure - ANZCompanies’ earnings forecast is full of low-balling