LONDON (AFP) - World stock markets rallied on Monday after troubled Dubai received a bailout from oil-rich Abu Dhabi and US banking giant Citigroup said it was emerging from government assistance. Traders appear to be reacting positively to news that Citigroup has reached a deal to repay some 20 billion (dollars, 14 billion euros) in TARP funds, said Joseph Hargett at US-based Schaeffers Investment Research. Also bolstering sentiment is a report that Abu Dhabi has given Dubai 10 billion dollars in financing for Dubai Worlds debt, he added. Londons FTSE 100 index of leading shares closed up 1.02 percent at 5,315.34 points, while the Frankfurt Dax gained 0.80 percent to end at 5,802.26 points and the Paris CAC 40 rose 0.70 percent to 3,830.44 points. Elsewhere in Europe, Zurich rose 0.34 percent, Amsterdam gained 0.42 percent and Madrid was up 0.77 percent. Milans benchmark index jumped 1.07 percent. On Wall Street, the Dow Jones Industrial Average edged up 0.27 percent and the tech-heavy Nasdaq index rose 0.68 percent by the early afternoon. Equity markets charged after Dubai received the cash to pay part of the debt of government-owned conglomerate Dubai World and its property unit Nakheel. The announcement came on the day Nakheel was supposed to repay sukuks, or Islamic bonds, worth 3.5 billion dollars and the return on them, amid speculation that the troubled developer would not be bailed out. European markets started the week on the front foot, with indices rallying as much as one percent after investor fears concerning Dubai Worlds debt problems were eased, said Joshua Raymond, an analyst at financial spread-better City Index. The news helped to lift the banking sector that had been dogged by fears of exposures to debt repayments by Dubai, and has also lifted sentiment on a broader scale in the market. Markets got a further boost after Citigroup said it would repay 20 billion dollars in government aid and outlined a plan to emerge from a massive bailout, in a fresh sign that the banking sector is closer to standing on its own. The safe-haven dollar dropped against the euro as market jitters eased. Across in the Middle East, Dubai stocks surged 10.37 percent on Monday on the back of the Abu Dhabi handout. Abu Dhabis last-minute intervention to help Dubai World meet its December 14 deadline to repay its 3.5-billion-dollar bond payment is boosting global equities, causing a broad sell-off in the US dollar and the Japanese yen, said analyst Ashraf Laidi at trading co CMC Markets. Dubai rocked markets on November 25 when it requested a moratorium on debt repayments for its heavily-indebted Dubai World group, sparking fears of a sovereign debt default. In Asian trade on Monday, Tokyo stocks ended 0.02 percent weaker after a survey of corporate Japan showed firms plan to slash investment to cope with the fallout from the recession. Hong Kong finished 0.84pc higher.