27 Nov 2009 Financial fears over Dubai trigger £44bn FTSE bloodbath

[Watchman]

Financial fears over Dubai trigger £44bn FTSE bloodbath

By Daily Mail Reporter
Last updated at 1:56 AM on 27th November 2009


Almost £44billion was wiped off London's biggest companies yesterday as markets were spooked by fears over Dubai's financial health and technical glitches hit the Stock Exchange.

The FTSE 100 tumbled more than 3 per cent in its biggest one-day percentage fall since March.

Royal Bank of Scotland and Barclays both fell almost 8 per cent and HSBC was nearly 5 per cent down. Lloyds Banking Group ended the day almost 6 per cent lower.


Revelations of massive debts of Dubai World sent the markets into turmoil

Shockwaves surged through global stock markets after investors were stunned by debts of £36.4billion at government investment company Dubai World.

It has asked creditors if it can postpone forthcoming payments, sparking fears of a potential default.


More...
Brash, flash and built on a mind-boggling scale, it was a monument to vanity and greed ... now Dubai is sinking under £48bn debts


David Jones, head of market analysis at IG Index, said: 'It looks like an over-reaction but it could be an ugly end to the week. Everyone seems to have forgotten about the credit crunch but today shows there could be more bad news to come.'

Adding to the problems, the London Stock Exchange was down for almost three hours due to a technical fault. The hitch affected more than 2,800 companies-whose shares are traded there. The business was already facing lower trading volumes as well as increasing competition from rival platforms.

An LSE spokesman said: 'There were connectivity problems for a number of customers. Some people could execute trades and some people couldn't.'

Mr Jones warned that the glitch could have a 'psychological effect' on markets' performance in the near future.

U.S. markets were closed for Thanksgiving holidays yesterday but France's CAC 40 and Germany's Dax both also fell more than 3 per cent.