Tags: Dubai | markets | stumble | debt

Dubai Debt Crisis Rocks World Markets

Friday, 27 November 2009 10:15 AM

Market experts say the debt revelations from Dubai this week will not lead the global economy back into recession, but have seriously damaged the Emirate's standing as a leading financial hub.

The Dubai government caught investors off-guard late Wednesday by announcing it was asking creditors for a six-month moratorium on the debt repayments of Dubai World and Nakheel, one of its biggest holding companies and its real estate arm.

The U.S. stock market opened lower on Friday as traders seized their first chance to respond to the news after the Thanksgiving holiday.

European markets had already recouped earlier losses, while Asia markets closed lower amid worries about the impact of Dubai's debt problems elsewhere.

"It's so easy to jump onto the gloom & doom bandwagon over this," Stephen Pope, Chief Global Equity Strategist at Cantor Fitzgerald told CNN.

"It might slow the pace of recovery for a while but I don't think it's going to be one of these cataclysmic moments that suddenly means equities fall of a cliff and means that the economy turns south once more," he said.

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Friday, 27 November 2009 10:15 AM
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