JEDDAH: Governments around the world rolled out fresh measures yesterday to shield businesses and banks from a looming “credit tsunami” as global stock markets endured further turbulence.

While new figures showed cross-border lending by banks had suffered its biggest decline for a decade, French President Nicolas Sarkozy said the world financial crisis shows that free-market ideology is now discredited and that economies need strong state intervention to succeed. “The ideology of the dictatorship of the market ... is dead,” he said in a speech in which he announced that France will set up a sovereign wealth fund to “intervene massively” in companies of national strategic importance.

If a summit of world leaders on the crisis to be held next month in the United States is successful, Sarkozy said, “a better world will emerge from this crisis than the one we had before.”

Several governments have unveiled packages over the last month totaling more than $3 trillion, including loan guarantees and cash injections, to restore confidence to the financial system and reverse a sharp slowdown in lending.

Jordanian Prime Minister Nader Dahabi announced yesterday that the government would guarantee all bank deposits in the country until the end of 2009.

GCC finance ministers and central bank governors will meet in Riyadh tomorrow to discuss mechanisms to protect their economies from the impact of global financial meltdown.

“The effect of the global crisis on GCC markets could not be justified, given the strong performance of their economies and companies,” said Abdul Rahman Al-Attiyah, secretary-general of the six-member Gulf Cooperation Council.

Wall Street shares staged a spirited rebound yesterday, sparking turnarounds in London and Paris after Asian markets again suffered big losses on global recession jitters.

Dozens of traders walked off the trading floor at the Kuwait Stock Exchange yesterday and staged a demonstration to urge more government support for the financial sector.

The protest, the first of its kind since 2006, came ahead of a lower close on most markets in the Gulf region amid anxiety about the world financial crisis and as crude oil prices remained at less than half their 2008 peak.

The main index on the Kuwait exchange, the second largest stock market in the Arab world, finished down three percent at 10,481.10 points, with several companies trading even below their nominal value.

A Kuwaiti stock broker lost a court bid to force the temporary closure of the stock exchange, while scores of traders stormed out of the bourse demanding the government act to halt the near-daily losses. Other markets in the Gulf showed renewed falls yesterday, with the exception of Dubai Financial Market, which ended higher.

The Saudi stock market was closed yesterday but it lost 10.23 percent this week. The Tadawul All-Share Index (TASI) closed Wednesday at 6,160.80 points. The stock market turnover was SR32.78 billion this week.

Khaled bin Abdullah Al-Zamil, a prominent businessman and former chairman of Asharqiya Chamber, has advised Saudis to invest their money in real economy rather than in speculative business. “Hasty efforts to make money would end up in failure and losses,” he said. “The capital market is not created for speculation but for companies, savings and increasing capital,” he pointed out.

The DMF Index finished up 1.5 percent at 3,256.98 points after sinking 3.7 percent in initial trading. The market ended the week up 1.6 percent. The Abu Dhabi Securities Exchange dropped 2.2 percent to 3,517.07 points as the key real estate sector shed 5.8 percent, though the industrials sector lifted the market slightly, gaining 0.62 percent. The market ended the week 4.4 percent higher. The Doha Securities Market closed down 4.4 percent at 7,567.65 points with all sectors losing ground. It shed three percent in the week. The small Muscat Securities Market ended the day down 2.4 percent and Bahrain Stock Exchange drifted 0.8 percent.

In New York the Dow Jones Industrial Average bounced back after an early slide and was up 2.4 percent in midday trade at 8,722.31 while the tech-heavy Nasdaq had gained 1.12 percent to reach 1,633.80. The Frankfurt DAX pared some of its losses but fell 1.12 percent to close at 4,519.70.

— With input from agencies