MIDEAST STOCKS-UAE stock markets dive on Dubai debt concerns

* Dubai suffers biggest one-day loss in more than a year

* Banks, property shares hardest hit

* No recovery seen until more clarity from govt on debt

By Jason Benham and Enjy Kiwan

DUBAI, Nov 30 (Reuters) - Dubai's bourse .DFMGI suffered its biggest one-day fall in more than a year while Abu Dhabi .ADI fell the most on record as concerns over Dubai's ability to repay its debt sparked a sell-off across all sectors.

Banks and property shares were hardest hit on the first day of trading United Arab Emirates markets since Dubai called for a delay in repayment on the billions of dollars of debt for the Dubai World conglomerate that has driven its break-neck growth.

In Dubai, 18 out of 32 stocks ended limit down and in Abu Dhabi, 28 out of 60.

"The falls were expected. We were hoping for a government statement that would alleviate concerns," said Haissam Arabi, chief executive at Gulfmena Alternative Investments.

"In the absence of that, the market had to react to the news."

Dubai tumbled 7.3 percent to 1,940 points, its biggest decline since Oct. 8, 2008 while Abu Dhabi plunged 8.3 percent to 2,668 points, its biggest ever one-day loss, according to Reuters data.

Dubai's Emaar Properties EMAR.DU, builder of the world's tallest tower, fell 9.9 percent while National Bank of Abu Dhabi NBAD.AD lost 9.7 percent after it said earlier on Monday it had $345 million exposure to two Dubai World units. [ID:nWEA3423]

Standard & Poor's on Nov. 25 downgraded its ratings on several Dubai government-related entities, including Emaar, after the government said it will ask creditors of two flagship firms, Nakheel and Dubai World, for a standstill on debt until May 2010. [ID:nN25365764]

The news of the repayment delay was announced on the eve of the Muslim Eid al-Adha holiday which began on Nov. 26.

Analysts and traders said stocks in the UAE would likely remain under pressure until the market had fully digested the news and until there was further clarity from the government regarding the debt situation.

"We have not had an opportunity to price in recent developments. International markets have priced it in," said Ali Khan, managing director and head of brokerage at Arqaam Capital.

Asian stocks rallied recouping some of last week's losses after the UAE on Sunday offered the region's banks emergency support and Abu Dhabi said it would provide selective support to Dubai firms. [ID:nGEE5ASOAH]

"Investor confidence takes years to build up but seconds to lose," said Matthew Wakeman, managing director for cash and equity-linked trading at EFG-Hermes in Dubai.

"There will probably be no stabilisation until well into next week.

(Editing by Thomas Atkins and Patrick Graham)

((dubai.newsroom@thomsonreuters.com; +971 4 391 8301)