Indian markets staged a big comeback on Monday, as fears receded over the impact of the Dubai debt crisis. The central bank of the UAE has said that it will pump in additional liquidity to tackle the crisis.
The Sensex was up 204 points at 16836 while Nifty gained 63 points to trade at 5005. Buying interest emerged across the board with realty, metals and capital goods stocks leading the gains. In the Sensex pack, JP Associates and Tata Motors rose over 3.5 per cent each.
Asian stock markets rebounded on Monday from their steep fall last week after the United Arab Emirates moved to contain the fallout from Dubai's debt crisis.
Major markets jumped by 2 per cent or more after tumbling on Friday amid fears Dubai's debt problems could lead to more financial instability just as the global recession is easing.
The UAE's central bank helped soothe investor fears, at least for now, by pledging on Sunday to make extra funding available to all banks in the country, including foreign institutions with local branches.
However, the bank's announcement, aimed at shoring up confidence and averting a bank run, did not mention any specific help for Dubai. The troubled emirate, which splurged on flashy developments and other investments during the credit boom, said last week it now needed at least a six-month reprieve from paying its roughly $60 billion debt.
Nearly every market traded higher in Asia, with Japan's Nikkei 225 stock average climbing 224.82 points, or 2.5 per cent, to 9,306.34.
Hong Kong's Hang Seng added 703.15 points, or 3.3 per cent, to 21,837.65 and South Korea's Kospi added 2.7 per cent to 1,565.80. Both those markets tumbled nearly 5 percent on Friday.
Elsewhere, Shanghai's market climbed 2.4 percent, Australia's index was 2.7 percent higher and Taiwan's benchmark rose 1.7 percent.
Asia's turnaround followed Europe, where markets recovered on Friday.
Uncertainty surrounding Dubai's fate sent Wall Street lower, though the losses were less than other markets.
The Dow on Friday fell 154.48, or 1.5 per cent, to 10,309.92. The broader Standard & Poor's 500 index fell 19.14, or 1.7 percent, to 1,091.49, and the Nasdaq composite index fell 37.61, or 1.7 percent, to 2,138.44.
Oil prices rebounded to near $77 a barrel in Asia as panic about the global fallout from Dubai's debt problems abated.
Benchmark crude for January delivery rose 61 cents to $76.66 in electronic trading on the New York Mercantile Exchange. The contract fell $1.91 to settle at $76.05 on Friday.