* FTSEurofirst 300 closes 1.4 pct lower on Dubai concerns
* Energy stocks among top decliners; banks fall
* Merck down on U.S. drug approval delay; other pharmas fall
By Brian Gorman
LONDON, Nov 30 (Reuters) - European shares fell to their lowest close in more than three weeks on Monday, with oil companies among the biggest losers, as worries about Dubai’s debt continued to unsettle global equity markets.
The FTSEurofirst 300 .FTEU3 index of top European shares fell 1.4 percent to 985.30 points, the lowest close since Nov 4.
The index rose 0.9 percent in November and is up more than 52 percent from the lifetime low it 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. [ID:nSP362937]
Dubai’s benchmark index closed 7.3 percent lower on Monday.
“We don’t see this as a turning point. We’re not down that far from the recent peak,” Teun Draaisma, equity strategist at Morgan Stanley, in London, told Reuters.
“The new theme is sovereign crises, rather than the banking crisis. But, perversely, these kind of risks mean that interest rates will stay low. No government in its right mind will start to tighten all of a sudden. We think the market will go higher.”
In an across-the-board decline, energy shares were among the biggest fallers, even as crude oil CLc1 futures staged a late recovery to trade above $76 a barrel after hitting a six-week low in the previous session.
Dubai last week raised fears of a second bout of global financial turmoil by asking for a six-month repayment freeze on debt issued by Dubai World [DBWLD.UL] and its unit Nakheel [NAKHD.UL], a property developer at the heart of the emirate’s boom.
Analysts are split on how deep the worldwide impact will be, though some banks have already been identified as having significant exposure in the region.
Merck KGaA (MRCG.DE) fell 4.1 percent as U.S. drug regulators held up an application from the drugmaker to bring its multiple sclerosis pill cladribine to the market. [ID:nGEE5AT1KS]
RWE (RWEG.DE) fell 1.6 percent after its chief financial officer told a German newspaper the utility will use the proceeds from the sale of its remaining stake in American Water (AWK.N) to cut debt instead of paying a special dividend.
Concern on Dubai more than outweighed further evidence of recovery in the United States, the world’s biggest economy.
Wall Street, which only traded for three and a half days last week due to Thanksgiving, was lower around the time European bourses were closing.
Retail stocks, such as internet bookseller Amazon (AMZN.O), rose as early data indicated they had benefited from higher spending over the “Black Friday” weekend.
The Chicago Purchasing Management Index rose to 56.1 in November, up from 54.2 in October, compared with forecasts in a Reuters poll of 53.7.
“The Chicago PMI was very bullish,” said Morgan Stanley’s Draaisma.” (Editing by David Cowell) ((firstname.lastname@example.org; +44 20 7542 9128; Reuters Messaging: email@example.com))