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World markets react to Dubai debt

2009-11-28 12:27 BJT

Special Report: Dubai Debt Crisis |


European stock markets rebounded slightly on Friday after a shaky start. Meanwhile, Wall Street didn't fall as much as first feared following reports of Dubai's debt crisis. Concerns over Dubai's debt default rippled through world markets for a second day on Friday.

On Wall Street, the Dow Jones industrial average was down 1.6 percent, at just over 10, 300 soon after the open, while the broader Standard Poor's 500 index fell 1.7 percent. But European shares rose. The FTSE 100 index of leading British shares was up 0.8 percent while Germany's DAX rose 0.9 percent. The CAC-40 in France ended 1 percent higher. British PM Gordon Brown said, "I've talked to the chairman of the Financial Security Board in my capacity as president of the G20 and I believe we are satisfied that the arrangements in place, the mechanisms that we've got in place can monitor what's happening, can be sure this is something that's containable and is localised." Still, the unfolding crisis in Dubai pointed to the vulnerability of the global economy despite recent signs of recovery.

Analysts are divided over the likely fallout from the Dubai announcement. Robert Halver, chief Analyst for Baader Bank said, "I don't expect the Dubai problem to get as serious as Lehman Brothers. What's important now is that everybody works together."

Meanwhile, one analyst in Germany believes the impact of Dubai's financial problems would be most felt by certain countries such as Greece and Ireland.

Editor: Zhang Ning | Source: