Dubai Receives a Lifeline, Forex Pairs trade steady

The U.S stock session drifted higher yesterday, after good news came out from Asia stating that Dubai will receive a lifeline. Only last week Dubai was in the spot light, thought to be on the brink of a collapse, as Dubai world requested to delay its debts due to lack of liquidity. In a surprising move Abu Dhabi, came to the rescue, providing a $10 billion bail-out. The news sparked immediate buying across the board and sent the indices to higher levels. The Hang Seng closed the session with a 0.84% gain, while Japan’s Tokyo Nikkei floated higher from a negative session to close at its starting point.

Across the globe, news wasn’t as sympathetic, as Mexico received a sovereign credit rating downgrade. Even though the news was widely expected by economists it still weighed on investor’s sentiment regarding further possible downgrades. Mexico’s ishares finished the session higher with a 1.21%, but investors remained cautious.

On the U.S market, Citigroup took center stage reaching an agreement with treasury regarding its TARP bail-out funds. According to the independent Business edition, Citigroup said it would raise $20.5bn in shares and equivalent financial instruments, as well as paying a $1,7bn sliver of its employee bonuses in shares instead of cash. The US Treasury holds $20bn in preferred stock of Citigroup as a result of the emergency cash injections it made during last year's financial panic, and will be repaid that money immediately.

Unlike previous sessions Materials led the way higher with a 1.45% gain. The lagger of the day was the financials, closing with a 0.56% profit. From a technical point of view the S&P500 closed the session around prior resistance at $1114.11.

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