Europe shares rebound from sharp fall; banks lead

* FTSEurofirst 300 index closes 1.2 percent higher

* Banks reverse falls, end higher

* ING falls after pricing rights issue

By Brian Gorman

LONDON, Nov 27 (Reuters) - Rising bank stocks led a broad rebound in European shares on Friday from the steep fall in the previous session triggered by concerns over Dubai's debt.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares ended up 1.2 percent at 999.59 points following a 3.3 percent fall on Thursday - the biggest daily decline in seven months - which traders felt was overdone.

Banks added the most points to the index, though nearly every sector gained.

BNP Paribas (BNPP.PA), Banco Santander (SAN.MC), Barclays (BARC.L), Credit Suisse (CSGN.VX), Deutsche Bank (DBKGn.DE) and UBS (UBSN.VX) rose between 1.2 and 2.8 percent.

Dutch bank and insurer ING (ING.AS) fell 4.3 percent after pricing a deeply-discounted rights issue to reduce its dependence on state aid. [ID:nGEE5AQ07B]

Over the week, the European benchmark fell 0.3 percent. But it is up nearly 55 percent from a record low in early March, buoyed by several major economies emerging from recession.

Analysts are divided over the likely fallout from the Dubai debt crisis many believed the market had overreacted.

"Dubai is a very special case," said Heino Ruland, strategist at Ruland Research, in Frankfurt.

"It's a very specific problem, which can't be transferred to other markets. Market participants will realise that this has nothing to do with the global crisis."

Banks outside the Gulf played down their exposure to Dubai and European leaders said the world economy was now strong enough to cope with the setback. [ID:nGEE5AQ1IM]

The crisis began on Wednesday when Dubai, one of the United Arab Emirates, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel.

Energy stocks also turned around as crude prices CLc1 pared losses for the day to less than 3 percent, taking them above $75 a barrel.

ENI (ENI.MI), BP (BP.L), Royal Dutch Shell (RDSa.L) and Total (TOTF.PA) were up between 0.5 and 2 percent.

Across Europe, Britain's FTSE 100 .FTSE ended the day 1 percent higher; Germany's DAX .GDAXI and France's CAC-40 .FCHI rose 1.3 and 1.2 percent respectively.

"The markets have found stability today after things were looking a little dire after yesterday's big sell-off and a continuation of the selling earlier this morning," said Angus Campbell, Head of Sales, Capital Spreads.

CARPHONE WAREHOUSE RISES

Carphone Warehouse (CPW.L), Europe's biggest mobile phone retailer, rose 1.3 percent after raising its earnings forecast and expressing confidence about Christmas trading [ID:nGEE5AP1US].

Miners gained as gold prices bounced from one-week lows, other metals rose and the dollar trimmed gains.

BHP Billiton (BLT.L), Lonmin (LMI.L), Rio Tinto (RIO.L), Vedanta (VED.L) and Xstrata (XTA.L) rose between 1.6 and 4.9 percent.

Wall Street was lower around the time European bourses were closing.

The Dow Jones .DJI, S&P 500 .SPX and Nasdaq Composite .IXIC were down between 0.9 and 1.1 percent.

U.S. markets, which hit 13-month closing highs on Wednesday and were closed on Thursday for the Thanksgiving Day holiday, will close at 1800 GMT.

Investors will watch for evidence of U.S. consumer spending patterms.

Black Friday, the day after Thanksgiving, is often the single busiest shopping day of the crucial holiday season, which accounts for nearly one-fifth of the retail industry's annual sales. [ID:nN27419583] (Editing by David Cowell) ((brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters Messaging: brian.gorman.thomsonreuters.com@reuters.net))