Brazil stocks, real rise, bucking Dubai concerns

(Adds comments from central banker, updates to close)

By Guillermo Parra-Bernal and Silvio Cascione

SAO PAULO Nov 27 (Reuters) - Brazilian stock and currency markets rose on Friday, bucking global concerns over a possible debt default by Dubai, as investors judged recent declines in some stocks as overdone.

Utilities, credit card companies and consumer goods makers led gains in the benchmark Bovespa index .BVSP, which rose 1.04 percent to 67,082.15 points. The index, which tumbled 2.3 percent on Thursday, was down as much as 1 percent earlier in the session.

"The turnaround in stock prices suggests that few people think Brazil equity markets will be seriously imperiled by Dubai events," said Lucio Bagio, a stock futures trader with Sao Paulo-based Concordia Corretora brokerage.

The Bovespa futures contract due at the end of December INDZ9 gained 1.28 percent.

Local investors gave no sign of moving into local bonds as a safe haven against stock market volatility, said Jose Francisco de Lima Goncalves, chief economist for Sao Paulo-based Banco Fator.

In a local auction on Thursday, yields for local bonds maturing between 2010 and 2017 were largely within levels of previous sales in recent weeks.

That indicates that concerns over Dubai remain limited as Brazil's burgeoning economy and comfortable dollar holdings should prevent any credit markets turmoil, said Bagio.

Sales of dollars by exporters to banks and other investors seeking refuge to the dollar helped Brazil's currency wipe out some of the 1.4 percent loss on Thursday. The real BRBY firmed 0.4 percent to 1.743 to the dollar from Thursday's session.

The government wants the real to slow gains in a bid to protect the competitiveness of exporters.

"The situation in Dubai is obviously not good for sentiment and now that we are moving into the end of the year when liquidity starts to not be as plentiful as before, investors should turn a bit more defensive," said Paul Mackle, a strategist with HSBC in London.

Non-voting shares of Petrobras (PETR4.SA), the index's heaviest stock, erased earlier losses and rose 1.17 percent to 38.90 reais, despite a drop of 2.45 percent in oil CLc1 in international markets.

Preferred shares of Vale (VALE5.SA), the world's largest iron ore miner, rose about 1 percent to 42.90 reais.

Banco do Brasil (BBAS3.SA), Latin America's largest lender, closed up 1.95 percent to 30.78 reais after Reuters reported on Friday that the Brasilia-based lender wants to buy a regional lender in the United States and expand into Argentina, Chile, Colombia and Peru. [ID:SPG002611]

Dubai's announcement on Wednesday that it would attempt to reschedule debt payments on $59 billion owed by its Dubai World commercial real estate unit is likely to spur significant corrections in the prices of emerging markets assets while casting more doubts over the sustainability of a global recovery.

As the weekend approaches, worries related to bank exposure on developed markets will probably send ripple effects down through emerging markets during next week, according to Flavia Cattan-Naslausky, a strategist with RBS Securities.

Central bank president Henrique Meirelles also said in Sao Paulo on Friday that no Brazilian banks are exposed to the potential Dubai default.

The situation in Dubai "is one of the reasons why we have alerted against excessive euphoria," Meirelles said. ((Additional reporting by Luciana Lopez in Sao Paulo and Ana Nicolaci da Costa in Brasilia, Editing by Gary Crosse)) ((guillermo.parra@thomsonreuters.com; +55-11-5644-7714; Reuters Messaging: guillermo.parra.reuters.com@reuters.net))