The story appears on

Page A16

November 28, 2009

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Finance

Global stocks tumble over Dubai problem

STOCKS tumbled yesterday as fear swept world markets that financial trouble in the Middle Eastern city-state of Dubai will upend a global economic recovery.

Major stock indexes fell about 2 percent from 13-month highs, including the Dow Jones industrial average, which slid 200 points in the first minutes of a shortened trading day. Trading volume had been expected to be light after the Thanksgiving holiday.

In the first half hour of trading, the Dow Jones industrial average fell 196.27, or 1.9 percent, to 10,268.13. The broader Standard & Poor's 500 index fell 23.65, or 2.1 percent, to 1,086.98, and the Nasdaq composite index fell 44.89, or 2.1 percent, to 2,131.16.

European stock markets regained their poise yesterday following Thursday's 3-percent losses. In Europe, the FTSE 100 index in Britain climbed 18.79 points, or 0.4 percent, to 5,212.92 while Germany's DAX rose 25.33 points, or 0.5 percent, to 5,639.50. The CAC-40 in France was 23.89 points, or 0.7 percent, higher at 3,703.12.

Market confidence was ravaged by Wednesday's news that Dubai World, a government investment company with about US$60 billion worth of debt, has asked creditors if it can postpone forthcoming payments until May. That stoked fears of a potential default and contagion around the global financial system, particularly in emerging markets. On Thursday, Europe's main indexes slid more than 3 percent, with banks, especially those thought to have exposure to Dubai such as Barclays Plc, HSBC Plc and Standard Chartered Plc, particularly badly hit.

Indexes in emerging markets have so far avoided a second day of heavy losses, with Russia and Brazil down about 1 percent, although Asian markets lost as much as 5 percent.

Earlier, Asian stocks were particularly badly hit as they played catch-up following the big losses in Europe in the previous session. Hong Kong's Hang Seng yesterday closed 1,075.91 points, or 4.8 percent, lower at 21,134.50, while South Korea's barometer dipped 4.7 percent to 1,524.50. Elsewhere in Asia, Japan's Nikkei 225 stock average fell 3.2 percent to 9,081.52 while Australia's index dropped 2.9 percent.

Oil tracked developments in stock markets, and crude for January delivery fell US$3.49 to US$74.47 a barrel in electronic trading on the New York Mercantile Exchange.

Analysts said more clarity about the long-term impact of Dubai's troubles would likely emerge next week, when Wall Street is back to normal trading hours following the Thanksgiving Day holiday.

"With US markets only open for half a day today (Friday), we are going to have to wait till early next week to see if stock markets view this as a little local difficulty, or something more serious," said Tim Hughes, head of sales trading at IG Index.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend