Dubai’s ruler finally broke his silence over the emirate’s financial troubles today as regional stock markets tumbled again.

London’s FTSE 100 Index jumped 1.5% today as worries over the global impact of the Dubai debt crisis showed signs of easing.

Dubai’s debt crisis was dragging down the main stock markets in the United Arab Emirates for a second day today.

Asian stock markets rose today following modest gains on Wall Street and amid increased confidence the Dubai debt crisis was unlikely to derail the global recovery.

Dubai refused to cover the huge debts of its commercial subsidiary company today despite a record fall on its stock market.

Dubai’s main stock exchange dropped more than 7% today, the first day of trading in the United Arab Emirates since Dubai World announced it was struggling with its $60bn (€40bn) debt.

Dubai’s main stock exchange dropped nearly 6% today, the first day of trading since the city-state went public with its huge debt crisis.

The United Arab Emirates’ central bank is saying it “stands behind” local and foreign banks operating in the country, offering them access to money in a sign the Gulf Arab nation’s federal government is racing to curtail investor fears over Dubai’s crushing debt.

Dubai was waiting today to see whether neighbouring Abu Dhabi would bail out the credit-crunched city-state.

Debt-burdened Dubai insisted today that it took into account the effect its bid to delay paying creditors would have on world markets.

IRISH and European stocks experienced their biggest fall in seven months yesterday as fears grew that failure by Dubai to repay $60 billion (€40bn) in debt could trigger the biggest sovereign default since Argentina in 2001.

Debt-swamped Dubai today asked for a six-month reprieve on paying its bills, causing a drop on world markets.

Dubai's main investment company has asked creditors for a six-month delay on repaying its debts.