Market experts say the debt revelations from Dubai this week will not lead the global economy back into recession, but have seriously damaged the Emirate's standing as a leading financial hub. The Dubai government caught investors off-guard late Wednesday by announcing it was asking creditors for a six-month moratorium on the debt repayments of Dubai World and Nakheel, one of its biggest holding companies and its real estate arm.
The U.S. stock market opened lower on Friday as traders seized their first chance to respond to the news after the Thanksgiving holiday. Read more about the market reaction The Dow closed 153 points down while Nasdaq and the S&P lost 1.7 percent, although although light trading -- markets were only open half-a-day due to the holidays -- exaggerated any volatility in markets.
European markets closed higher after recouping earlier losses. Earlier, Asian markets fell amid worries about the impact of Dubai's debt problems elsewhere.
"It's so easy to jump onto the gloom and doom bandwagon over this," Stephen Pope, Chief Global Equity Strategist at Cantor Fitzgerald told CNN.Video: Analysis: Dubai debt 'hiccup' Video: Dubai debt fears Video: Investors scared by Dubai debt
"It might slow the pace of recovery for a while but I don't think it's going to be one of these cataclysmic moments that suddenly means equities fall of a cliff and means that the economy turns south once more," he said.
In a note to clients, Howard Wheeldon, senior strategist at BGC Partners, said the fallout from Dubai World's debt problems should be measured in days, not weeks.
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