Hong Kong: Asian stocks rebounded from early losses Monday after Dubai announced it was receiving $10 billion in emergency funds to cover its massive debts.
Dubai`s government said it was receiving a bailout from its from oil-rich neighbor Abu Dhabi to pay down debts owed by the struggling Dubai World investment conglomerate.
The state-owned company`s announcement it would delay payments on $60 billion in debt spooked markets in recent weeks as investors worried about more financial turmoil and reevaluated their assumptions about the ability of governments to make good on their enormous debts. So investors seemed relieved, as least for now, that the Middle Eastern city-state`s investment arm would have enough money to help pay $4.1 billion in debt due Monday.
"The Dubai news is a big surprise to the market," said Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong. "We were preparing for a lack of payment today and now they`re saying they will pay. This is definitely positive for investor confidence."
Most markets were down in early trade, dragged lower by falling commodity prices, before recouping their losses or putting on modest gains.
Japan`s Nikkei 225 stock average was little changed, down 2.19 points at 10,105.68.
Hong Kong`s Hang Seng rose 19.74 points, or 0.1 percent, to 21,921.85 and South Korea`s Kospi added 7.14 points, or 0.4 percent, to 1,664.04.
In other markets, India`s Sensex rose 0.8 percent, Australia`s benchmark added 0.4 percent and China`s Shanghai`s index was up 1.7 percent.
Wall Street, meanwhile, was poised for a stronger open as U.S. futures advanced. Dow futures were up 65, or 0.6 percent, at 10,549 and S&P futures added 6, or 0.5 percent, to 1,108.
In the U.S. on Friday, the Dow Jones industrial average rose 65.67, or 0.6 percent, to 10,471.50. The Standard & Poor`s 500 index gained 4.06, or 0.4 percent, to 1,106.41, while the Nasdaq composite index slipped 0.55, or less than 0.1 percent, to 2,190.31.
Oil prices also pared their losses, with benchmark crude for January delivery down 34 cents at $69.53 in Asian trade. On Friday, the contract gave up 67 cents.
The dollar fell to 88.53 yen from 88.95 yen. The euro was higher at $1.4674 from $1.4624.