After the ghost of global slowdown, it now seems to be the turn of Dubai debt crisis to hit the global stock markets, particularly the Asian markets. Indian markets also took a sizable hit after Dubai World’s repayment crisis. Indian stock market was in a healing mode, hovering around 17k mark, but the market is now surely going to suffer a lot due to the latest development in Dubai financial market.

State-owned investment holding company Dubai World’s decision to seek extension to repay its debt of $59 billion has sent terror-waves across the world and the same were also felt in the Indian Stock Market, spooking investor confidence. The Dubai crisis has also hit the Indian IPO market badly. JSW Energy, Lakshmi Vilas Bank, Emaar MGF are among the companies in India, which have recently headed for the IPO market to raise funds to support their expansion plans. The problem doesn’t end here and further extends to million of families which are solely or partly dependent on remittance from the Middle East. There are also healthy chances of job-cuts in construction sector in Dubai and this is surely not a good news for numerous Indian workers in Dubai.

However there is a very popular proverb that says, “Every cloud has a lightening” and yes, this cloud of crisis has also got a lightening and that is the recent remarks by India’s Finance Minister Pranab Mukherjee. Assuring the investors in India, he said that there is no need to press the panic button as there is a very limited exposure of Indian banking systems to the Dubai financial systems. Similar views were expressed by Navin Kapoor, Managing director of Xpertize United and a board member of the Indian Business Professional Council (IBPC) in Dubai. He said that the impact of Dubai crisis on India would be practically negligible.

Whatever the case may be, the truth is: Indian stock market is presently reeling under Dubai debt crisis and it will take the market at least few more months to recover and take the right path.