Indian markets join others in tumble after Dubai World debt fiasco

Mumbai, Nov 27 : Indian stock markets joined the tumble in bourses around the world Friday after Dubai government-owned holding company Dubai World, which manages that country's portfolio of businessess, said it had asked creditors for an extension of six months on debt repayments.

Indian benchmark equity indices plummeted on the opening bell with the sensitive index (Sensex) of the Bombay Stock Exchange (BSE) falling 2.67 percent or 451 points at 16,403.3 points. It had closed Thursday at 16,854.93 points.

By 11.22 a.m., however, the Sensex had stabilised a bit. At the time, it was at 16,431.40 points, still 423.53 points or 2.51 percent below its last close.

At the National Stock Exchange (NSE), the broader 50-share S&P CNX Nifty slipped to 4,865.05 points shortly after opening, 2.8 percent or 140.5 points below its previous close at 5,005.5 points.

By 11.22 a.m., the Nifty had also made a marginal recovery. It was at 4,876.1 points at that time, still 2.59 percent below its last close.

Investors remained jittery at other Asian markets as well over the exposure of banking giants like HSBC to Dubai World's debt.

A key Japanese index, the Nikkei, was 2.28 percent or 213.61 points lower at 9,169.63 points.

The Hang Seng, a benchmark index of the Hong Kong Stock Exchange was at 21,445.13 points, 3.45 percent or 765.28 points lower.

The Kospi, the benchmark index of the Korean Stock Exchange, also fell to 1,535.34 points, down 4.01 percent.

In China, the Shanghai composite index was ruling 1.82 percent in the red at 3,113.36 points.

Dubai World's debt burden stands at $59 billion of the total $80 billion debt of the state. The government of Dubai has authorised the restructuring of Dubai World to be spearheaded by the Dubai Financial Support Fund (DFSF).

Dubai markets were closed Friday and will reopen only on Monday.

On Thursday European markets were the first to feel the shock waves ofthe Dubai World debt moratium call with the key index of the London Stock Exchange, FTSE 100 index dropping 3.2 percent to close at 5,194.13 points

Banking shares were particularly hard-hit with Barclays and the nationalised Royal Bank of Scotland both fell almost 8 percent in Thursday's trading.

The French index, CAC 40, fell 3.41 percent at 3,679.23 points, while its German peer, the DAX slipped 3.25 percent to 5,614.17 points.

The US markets are shut Friday for Thanksgiving.