FTSE steady after Dubai panic sends Asia tumbling

The FTSE opened better than expected in early trading Friday after concerns over Dubai’s financial health sent Asian markets plummeting.

Shortly after 10am, the index was down more than 13 points, or 0.25%, to 5,181, with banks among the early winners.

Concerns over Dubai's ability to pay back its debts sent the FTSE to its biggest one-day fall in eight months yesterday, the index dropping more than 170 points, or 3.2%, to close under 5,200.

Investors had become jittery about banks' potential exposure to Dubai, despite assurances of only negligible exposure from a number of institutions.

Concerns over Dubai's financial health surfaced yesterday after a government-owned company asked for an extension on repaying its debts. Dubai World, a holding company which manages the emirate's portfolio of businesses, asked creditors for a six-month extension on debt repayments on $59bn of liabilities.

Japan's Nikkei 225 Stock Average tumbled today, dropping more than 300 points, or 3.2%, to 9,081, a four-month closing low. In Hong Kong, the Hang Seng index fell more than 1,000 points, or 4.84%, to close at 21,134.5 as large financial institutions like HSBC suffered over doubts about the economic stability of the Gulf state.

In London, miners are shouldering the heaviest selling. Fresnillo, down 2.29% to 833p, and Antofagasta are the worst hit, although Old Mutual suffered an early 1.75% drop to 112.5p.

Banks are stemming the losses. Royal Bank of Scotland is up 4.26% to 34.4p, while Lloyds Banking Group has advanced more than 3.2% to reach 61.05p.