LONDON — Europe’s main stock markets recovered further on Thursday, boosted by rallying banking shares as concerns about Dubai’s debt crisis eased, analysts said.

In late morning European deals, London’s benchmark FTSE 100 index was up 0.53 percent at 5,355.36 points.

Frankfurt’s DAX 30 gained 0.85 percent to 5,831.23 points and in Paris the CAC 40 increased by 0.88 percent to 3,829.29 points nearing the half-way stage.

The DJ Euro Stoxx 50 index of top eurozone shares won 0.80 percent to 2,900.89 points.

“The FTSE 100 has benefited from renewed interest in the banking sector,” said IG Index chief market strategist David Jones.

In London, Barclays bank jumped 4.74 percent to 311.6 pence while Deutsche Bank rose 2.0 percent to 49.92 euros in Frankfurt.

The share price of French lender Societe Generale gained 2.60 percent to 48.93 euros in Paris trading.

Gulf stock markets closed slightly up on Thursday, with the initial shock waves from the Dubai debt crisis that caused heavy losses appearing to have subsided, traders said.

Qatar’s Doha Securities Market closed 1.21 percent higher to rise above the psychological 7,000-point barrier, spurred by the banking sector.

The DSM added 5.3 percent on Wednesday, a day after shedding 8.3 percent on fears local companies could be exposed to the Dubai debt crisis.

The two United Arab Emirates markets of Dubai and Abu Dhabi are closed for the second day on a national holiday, while the Saudi market, the largest Arab bourse, and Oman remain shut for the Muslim Eid al-Adha holidays.

Meanwhile market reaction to Dubai’s credit woes has been “overstated,” the head of an Abu Dhabi-controlled bank said Thursday, amid fears the Gulf city state may default on billions of dollars worth of debt.

“We are very confident and optimistic about (the regional economy),” Michael Tomalin, chief executive of National Bank of Abu Dhabi, said.

“I think the market reaction to Dubai has been very overstated.”

News that conglomerate Dubai World had asked for a moratorium on tens of billions of dollars in debt sent world markets into a tailspin last week, but analysts have said oil-rich Abu Dhabi would step in to help its neighbour.

In other stock market trading on Thursday, Tokyo’s benchmark Nikkei-225 index closed up 3.84 percent to 9,977.67 points, as a weaker yen sparked buying in exporter shares.

The auto sector meanwhile gained on news that Mitsubishi Motors was in talks with PSA Peugeot-Citroen about a tie-up. In European deals, the French carmaker PSA Peugeot-Citroen fell 0.59 percent to 24.45 euros.

Another loser on Thursday was Siemens — the German industrial giant shedding 2.15 percent to 66.14 euros after the group suffered a net loss of one billion euros (1.5 billion dollars) in its final quarter and said worse was to come.

The group is a good gauge for activity in the global manufacturing sector, with more than 400,000 workers in 190 countries making everything from light bulbs to medical equipment, power generators and high-speed trains.

Looking ahead, Siemens forecast a five percent drop in sales for the 2009/10 fiscal year, and an operating profit of between six and 6.5 billion euros, which could represent a drop of up to 20 percent.

Wall Street closed mixed on Wednesday as investors mulled a weaker-than-anticipated survey on job losses and a cautiously optimistic tone from the Federal Reserve.

The Dow Jones Industrial Average drifted down 0.18 percent to close at 10,452.68 points in a choppy session a day after the blue-chip index rallied to a 14-month closing high.

The Nasdaq composite gained 0.42 percent to 2,185.03 points and the Standard & Poor’s 500 index was virtually flat at 1,109.24

Source: AFP

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