* World stocks up as risk aversion eases
* U.S. dollar, Treasuries unwind gains as fears soothed
* U.S. stocks gain as Dubai fears contained
(Updates with closing prices)
By Manuela Badawy
NEW YORK, Nov 30 (Reuters) - World stocks rose on Monday as
shock waves from Dubai's debt delay proposal died down after
the Arab emirate's largest company said it planned to
restructure some of its units.
The U.S. dollar fell against the euro after the United Arab
Emirates promised liquidity, easing worries about a default.
Dubai's proposed delay last week in repaying billions of
dollars of debts of state-owned conglomerate Dubai World and
property subsidiary Nakheel roiled global markets. It raised
fears the emirate could default after funding a spectacular
building boom on a mountain of debt. []
For a graph on the Emirates' debt please click on:
http://graphics.thomsonreuters.com/119/ME_DBTSK1109.gif
Hopes possible fallout for U.S. banks from Dubai's debt
woes will be contained pushed the MSCI world stock index
<.MIWD00000PUS> 0.47 percent higher on the day, gaining 28.6
percent so far this year.
Late in the New York session, Dubai World said it was
planning a restructuring of some of its units including
developer Nakheel, in a move covering $26 billion in debt.
The UAE central bank's decision on Sunday to provide
emergency liquidity to its banks also helped ease some concerns
and prompted a bounce back in emerging markets across Asia.
Emerging shares <.MSCIEF> were up 1.29 percent while the
MSCI index of Asia Pacific stocks traded outside Japan
<.MIAPJ0000PUS> rose 2.64 percent.
"The Dubai issue will have only a transitory effect on
global markets and does not represent significant systemic risk
to emerging markets or the broader global financial system
unless it is revealed that a large global bank or hedge fund
has significant exposure to Dubai," RBC Capital Market said in
a note to clients.
The safe-haven U.S. dollar fell against a basket of
currencies <.DXY> by 0.26 percent as investors' fears of a
deterioration in the tepid global economic recovery calmed.
"Even though the dollar is down, risk has been definitely
taken off the table," said John McCarthy, director of foreign
exchange at ING Capital Markets in New York.
The euro <EUR=> rose 0.28 percent at $1.5007 pulling back
from last week's 15-month peak just above $1.5140. Against the
Japanese yen, the dollar <JPY=> was down 0.14 percent at 86.29
after a Japanese official said the government would try to stem
the currency's rise, although did not specify any measures.
[]
U.S. Treasuries rose slightly as the unwinding of a
safe-haven bid related to a possible Dubai debt default was
countered by month-end demand for U.S. government debt.
Benchmark 10-year Treasury notes <US10YT=RR> traded 1/32
lower in price, its yield rising to 3.20 percent from 3.21
percent late Friday.
Two-year Treasury notes <US2YT=RR> traded 1/32 higher in
price, yielding 0.67 percent after dipping to 0.62 percent on
Friday, the lowest since last December.
SHOPPING IN FOCUS
U.S. stocks rose helping the Dow post its fifth straight
monthly gain, on hopes possible fallout from Dubai's debt woes
will be contained.
But retail shares limited the advance as investors worried
the holiday shopping season might have gotten off to a tepid
start as consumers trimmed purchases over the Thanksgiving Day
holiday amid concerns about an uncertain economy.
The Dow Jones industrial average <> rose 0.34 percent,
at 10,344.84. The Standard & Poor's 500 Index <.SPX> gained
0.38 percent, at 1,095.63, while the Nasdaq Composite Index
<> firmed 0.29 percent, at 2,144.60.
Consumer spending, the backbone of the U.S. economy
accounting for two-thirds of activity, was significantly less
per person at the start of the holiday season even than last
year, when Lehman Brothers' cataclysmic collapse paralyzed the
global financial system.
Meanwhile, European shares fell to their lowest close in
more than three weeks, with oil companies among the biggest
fallers, as worries about Dubai's debt continued to unsettle
European equity markets.
The FTSEurofirst 300 <> index of top European shares
ended 1.3 percent lower at 986.70 points, the lowest close
since Nov 4. The index rose 1 percent in November and is up
nearly 53 percent from a lifetime low 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.
UK banks have the biggest loan exposure to the UAE. Please see:
http://graphics.thomsonreuters.com/119/DB_EXP1109.gif
(Additional reporting by Gertrude Chavez-Dreyfuss in New
York) ((manuela.badawy@thomsonreuters.com; +1 646-223-6055;
Reuters Messaging: manuela.badawy.reuters.com@reuters.net))
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