Global Bounce

Shares across the globe shuddered and then rebounded today as fears that Dubai’s debt crisis would sweep across the globe began to wane. “In London, the leading FTSE 100 index rose 16.16 points in early trading to 5,261.89 as this weekend’s intervention by the Central Bank of the United Arab Emirates to provide an emergency liquidity facility for local lenders appeared to calm investors. While the FTSE fell back 17.22 points after nearly an hour of trading, it was due to traders taking advantage of today’s early morning rally to make a profit on shares. There had been serious concerns that last week’s request from the Dubai Government to delay interest payments by Dubai World, the state-owned conglomerate which owes $59 billion of the country’s entire $80 billion debt mountain, would spark a run on local banks and leave lenders in the West nursing billions of dollars worth of losses. In Asia, Japan’s leading index bounced back 264.03 points, or 2.9 per cent, while in Hong Kong, the Hang Seng added 738.34 points, or 3.5 per cent. In France and Germany, stocks also opened higher.”