Asian stock markets rebounded today from their steep fall last week after the United Arab Emirates moved to contain the fallout from Dubai's debt crisis. Major markets jumped by 2 per cent or more after tumbling on Friday amid fears Dubai's debt problems could lead to more financial instability just as the global recession is easing. The UAE's central bank helped soothe investor fears, at least for now, by pledging to make extra funding available to all banks in the country, including foreign institutions with local branches. However, the bank's announcement, aimed at shoring up confidence and averting a bank run, did not mention any specific help for Dubai.
Nearly every market traded higher in Asia, with Japan's Nikkei 225 stock average climbing 224.82 points, or 2.5 percent, to 9,306.34. Hong Kong's Hang Seng added 703.15 points, or 3.3 per cent, to 21,837.65 and South Korea's Kospi added 2.7 per cent to 1,565.80. Both those markets tumbled nearly 5 per cent on Friday. Elsewhere, Shanghai's market climbed 2.4 per cent, Australia's index was 2.7 per cent higher and Taiwan's benchmark rose 1.7 per cent.
Asia's turnaround followed Europe, where markets recovered on Friday. Uncertainty surrounding Dubai's fate sent Wall Street lower, though the losses were less than other markets. The Dow on Friday fell 154.48, or 1.5 per cent, to 10,309.92. The broader Standard & Poor's 500 index fell 19.14, or 1.7 per cent, to 1,091.49, and the Nasdaq composite index fell 37.61, or 1.7 per cent, to 2,138.44. Wall Street futures pointed to a higher open in the US today.
Oil prices rebounded to near $77 a barrel in Asia as concerns about Dubai's debt problems abated. Benchmark crude for January delivery rose 61 cents to $76.66 in electronic trading on the New York Mercantile Exchange. The contract fell $1.91 to settle at $76.05 on Friday. In currencies, the dollar was steady at 86.65. The euro was higher at $1.5059 from $1.5009. *AP