* Dubai debt worry ripples across markets
* World stocks lower, emerging mkts down 1 percent
* Dollar hits 14-year low against yen
By Jeremy Gaunt, European Investment Correspondent
LONDON, Nov 26 (Reuters) - Debt problems in Dubai weighed on
stocks, helped lift bonds and stirred currency trades on
Thursday, as the dollar hit a 14-year low against the yen and
gold climbed to a new record high.
Markets were also set to trade on the day without much input
from the United States, where it was the Thanksgiving holiday.
Dubai said on Wednesday it was asking creditors of Dubai
World and property group Nakheel to agree a debt standstill as
it restructures Dubai World, the conglomerate that spearheaded
the emirate's breakneck growth. []
The announcement raised concern about the once-booming Gulf
region's financial health and added to general nervousness in
financial markets about the real state of the world economy at a
time when investors are also seeking to lock in 2009 profits.
"Investors will now have to re-appraise the quality of
sovereign support for state-owned entities in the region," Royal
Bank of Scotland said in a note.
"The other risk is that rating agencies re-assess their
views of names in the region ... which in many cases benefit
from substantial rating premiums driven by assumptions about
sovereign support, which is no longer a given."
MSCI's emerging market stock index <.MSCIEF> was down more
than 1 percent, underperforming the broader all-country world
index <.MIWD00000PUS>, which was down 0.7 percent.
The pan-European FTSEurofirst 300 index <> fell 1.8
percent, led lower by banks and general weakness in Asia.
"There's been a retracement in Asia overnight and the
banking sector has taken a hit. There are ongoing concerns on
the dollar," said Paul Webb, chief dealer at CMC Markets.
Earlier, Japan's Nikkei <> closed down 0.45 percent,
with exporters concerned about rising yen strength.
YEN ASCENDANT
The dollar strengthened against a basket of major currencies
<.DXY>, but only after tumbling to a 14-year low against the
yen and striking a 1-1/2 year low on the Swiss franc.
The earlier falls helped gold rise to a nominal record price
of $1,194.90 an ounce.
Some traders said the Dubai news had curbed risk appetite,
thereby lifting the dollar back up a bit.
There was also some impact on the British pound.
"There are concerns regarding the extent of the exposure of
the UK banks to Dubai, hence sterling is coming under pressure,"
said Ian Stannard for BNP Paribas.
Japan, meanwhile, indicated that it was not planning to do
anything immediately about the strong yen, which was at 86.90 to
the dollar <JPY=>.
Japanese deputy finance minister Yoshihiko Noda told Reuters
recent currency moves reflected dollar weakness and Tokyo was
not considering intervening now, and Finance Minister Hirohisa
Fujii said the move was at the stage where they should watch.
[]
The euro <EUR=> slipped 0.4 percent to $1.50725 after rising
more than 1 percent on Wednesday.
Euro zone government bond prices were higher.
(Additional reporting by Jamie McGeever and Simon Falush,
editing by Mike Peacock)
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((jeremy.gaunt@thomsonreuters.com; +44 207 542 1028; Reuters
Messaging: jeremy.gaunt.reuters.com@reuters.net))
