Conference called over debt crisis

Financial ministers from the Group of Seven leading economies are to hold a teleconference tomorrow to discuss world market stability as Middle Eastern markets tumbled today on the first business day after a historic US credit rating downgrade.

Japanese media said deputy finance ministers agreed on a conference call among the higher-level ministers. Kyodo News agency reported it would likely be held before Asian markets open on Monday morning, but the timing wasn't more specific.

The countries are concerned the historic downgrade of the US credit rating Friday would deal a significant blow to consumer and business confidence and financial markets.

The leaders from Britain, Canada, France, Germany, Italy, the US and Japan are also expected to discuss the eurozone sovereign debt concerns.

Standard & Poor rating agency announced late on Friday it would strip the US of its sterling AAA credit rating for the first time and move it down one notch, to AA+.

Economists say the real danger won't be higher interest rates but sinking confidence in the American economy and its leaders.

Middle East markets, which open from Sunday to Thursday, were the first to react to the late Friday news. Dubai's main market index was down more than 4 % at midday, and other Gulf markets also opened sharply lower.

China, the largest foreign holder of US debt, yesterday demanded that the United States tighten its belt and overcome its "addiction to debt."

Japan's Nikkei index lost ground in the past week due to debt crisis developments.