* FTSEurofirst 300 closes 1.4 pct lower on Dubai concerns
* Energy stocks among top decliners; banks fall
* Merck down on U.S. drug approval delay; other pharmas fall
By Brian Gorman
LONDON, Nov 30 (Reuters) - European shares fell to their
lowest close in more than three weeks on Monday, with oil
companies among the biggest losers, as worries about Dubai's
debt continued to unsettle global equity markets.
The FTSEurofirst 300 <> index of top European shares
fell 1.4 percent to 985.30 points, the lowest close since Nov 4.
The index rose 0.9 percent in November and is up more than
52 percent from the lifetime low it hit on March 9.
Dubai's government said on Monday it was not responsible for
the debts of its flagship conglomerate, offering little clarity
on a plan to delay billions in debt repayments that has rattled
world markets. []
Dubai's benchmark index closed 7.3 percent lower on Monday.
"We don't see this as a turning point. We're not down that
far from the recent peak," Teun Draaisma, equity strategist at
Morgan Stanley, in London, told Reuters.
"The new theme is sovereign crises, rather than the banking
crisis. But, perversely, these kind of risks mean that interest
rates will stay low. No government in its right mind will start
to tighten all of a sudden. We think the market will go higher."
In an across-the-board decline, energy shares were among the
biggest fallers, even as crude oil <CLc1> futures staged a late
recovery to trade above $76 a barrel after hitting a six-week
low in the previous session.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L>,
Total <TOTF.PA> and StatoilHydro <STL.OL> fell between 1.6 and
2.8 percent.
Dubai last week raised fears of a second bout of global
financial turmoil by asking for a six-month repayment freeze on
debt issued by Dubai World [] and its unit Nakheel
[], a property developer at the heart of the emirate's
boom.
Analysts are split on how deep the worldwide impact will be,
though some banks have already been identified as having
significant exposure in the region.
Banks to fall on Monday included Standard Chartered
<STAN.L>, Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>,
Banco Santander <SAN.MC> and Credit Suisse <CSGN.VX>, down
between 1.5 and 4.5 percent.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC-40 <> all ended the day 1.1
percent lower.
MERCK FALLS
Merck KGaA <MRCG.DE> fell 4.1 percent as U.S. drug
regulators held up an application from the drugmaker to bring
its multiple sclerosis pill cladribine to the market.
[]
Rival drugmakers GlaxoSmithKline <GSK.L>, Roche <ROG.VX> and
Sanofi-Aventis <SASY.PA> fell between 1.4 and 1.7 percent.
RWE <RWEG.DE> fell 1.6 percent after its chief financial
officer told a German newspaper the utility will use the
proceeds from the sale of its remaining stake in American Water
<AWK.N> to cut debt instead of paying a special dividend.
Concern on Dubai more than outweighed further evidence of
recovery in the United States, the world's biggest economy.
Wall Street, which only traded for three and a half days
last week due to Thanksgiving, was lower around the time
European bourses were closing.
The Dow Jones <>, S&P 500 <.SPX> and Nasdaq Composite
<> were down between 0.3 and 0.7 percent.
Retail stocks, such as internet bookseller Amazon <AMZN.O>,
rose as early data indicated they had benefited from higher
spending over the "Black Friday" weekend.
The Chicago Purchasing Management Index rose to 56.1 in
November, up from 54.2 in October, compared with forecasts in a
Reuters poll of 53.7.
"The Chicago PMI was very bullish," said Morgan Stanley's
Draaisma."
(Editing by David Cowell)
((brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters
Messaging: brian.gorman.thomsonreuters.com@reuters.net))
