THE GUARDIAN: FTSE 100 opens down 70 points before regaining ground / Japan's Nikkei closes down 3.2%; Hang Seng falls 5.3%
The Dubai financial crisis continued to send shares and commodities falling around the world this morning, despite efforts by the emirate's ruling family to calm the panic.
In London, the FTSE 100 tumbled by 70 points, or nearly 1.4%, to 5123 when trading began – but by 9.15am had erased nearly all of its losses. HSBC and Barclays were among the biggest fallers, along with mining companies.
There was also a bout of heavy selling in Asia. The Nikkei 225 closed 3.2% lower, with Japan's biggest banks leading the fallers. Hong Kong's Hang Seng index fell by 5.3%.
Major building firms in Asia also fell sharply, as traders anticipated that the Dubai building boom was over.
Predictions that Dubai could drag the world economy downwards again knocked $5.50 off the price of a barrel of oil, to $72.49.
Yesterday the FTSE 100 suffered its worst day's trading since March, falling by 170 points. This followed the news that Dubai World – the government-owned conglomerate that has led the dramatic growth in the Emirate – has asked to defer repaying some debts for six months.
It is still unclear whether Dubai World will default on its $80bn debts, which would be a major blow to the banking sector, or be bailed out by the United Arab Emirates.
Sheikh Ahmed bin Saeed al Maktoum, the uncle of Dubai's ruler Sheikh Mohammed bin Rashid al Maktoum, attempted to calm the situation last night. >>> Graeme Wearden | Friday, November 27, 2009
