South African shares gave up earlier gains on the back of weaker global markets that were once again dented by credit crises concerns, with the rand also sliding against the dollar. “More and more sub prime problems – that is why the market has given up all its gains. We were up 400 points at one stage,” a Johannesburg-based equities trader said.

“US futures were quite weak the whole day on the back of Wachovia reporting credit losses.”

The JSE blue chip top-40 index closed 0.55 percent weaker at 28,054.25 points, and the broader All Share index shed 0.43 percent to 30,920.21 points.

Renewed worries about financial firms hit by the credit crunch rattled global markets after Wachovia – the fourth-largest US bank – said on Friday it expected increased loan losses in the fourth quarter.

After starting the session on a firm footing, the rand stumbled after banking shares dragged European stocks lower. It was trading at 6.6050 to the dollar at1515 GMT, more than one percent weaker than its New York close of 6.52.

“Things looked good for emerging markets earlier in the day, but we saw dollar/yen move lower and the bad news coming out of the UK banking sector all complicated things,” said an Johannesburg-based ABN Amro dealer.

Dealers said although the rand was holding the firmer side of 7/dollar convincingly, it could weaken to 6.70 overnight after US stocks opened in negative territory.