Asia stocks rebound after UAE pledges bank support

Asia stocks rebound afte

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November 30, 2009 10:11
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Asian stock markets rebounded Monday 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 percent or more after tumbling on Friday amid fears Dubai's debt problems could lead to more financial instability and were a sign of hidden troubles elsewhere in the still weak world economy. The UAE's central bank helped soothe investor fears, at least for now, by pledging Sunday 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. The troubled emirate, which splurged on flashy developments and other investments during the credit boom, said last week it now needed at least a six-month reprieve from paying its roughly $60 billion debt. In its first day of trade since last week's bombshell, Dubai's stock exchange dropped nearly 6 percent on Monday. Nearly every market traded higher in Asia, with Japan's Nikkei 225 stock average climbing 264.03 points, or 2.9 percent, to 9,345.55. Hong Kong's Hang Seng added 738.34 points, or 3.5 percent, to 21,872.84 and South Korea's Kospi added 2 percent to 1,555.60. Both those markets tumbled nearly 5 percent on Friday. Elsewhere, Shanghai's market climbed 3.2 percent, Australia's index was 2.7 percent higher and Taiwan's benchmark rose 1.2 percent. In India, the stock market gained 1.9 percent after the government said the country's economy grew 7.9 percent last quarter, far exceeding expectations. Asia's turnaround followed Europe, where markets recovered 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 percent, to 10,309.92. The broader Standard & Poor's 500 index fell 19.14, or 1.7 percent, to 1,091.49, and the Nasdaq composite index fell 37.61, or 1.7 percent, to 2,138.44. Wall Street futures pointed to a higher open in the US Monday. Dow futures were up 37, or 0.4 percent, at 10,329 and S&P futures gained 6.7, or 0.6 percent, to 1,096.20. Oil prices rebounded to near $77 a barrel in Asia as panic about the global fallout from Dubai's debt problems abated. Benchmark crude for January delivery rose 42 cents to $76.47 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 fell to 86.16 yen from 86.65 yen. The euro was higher at $1.5056 from $1.500

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