By Michael Patterson Dec. 2 (Bloomberg) -- Emerging-market stocks rallied for a third day, led by Qatar, as concern diminished that Dubai will default. The yen weakened on speculation Japan will act to curb its gains and the dollar fell, driving gold to a record. The MSCI Emerging Markets Index rose 0.7 percent at 10:50 a.m. in London, heading for its longest winning streak in three weeks. Qatar’s DSM 20 Index jumped 5.3 percent. The yen declined against all 16 most-traded currencies, while the dollar weakened versus 14 and gold touched $1,217.23 an ounce in London. U.S. stock index futures were little changed. Mark Mobius, who oversees more than $30 billion as chairman of Templeton Asset Management Ltd., said in a Bloomberg Television interview in Hong Kong that Dubai will be “bailed out” by its neighbors. Prince Alwaleed bin Talal, the billionaire Saudi investor, said Middle East economies won’t be “shaken” by the crisis. Dubai’s debt rescheduling will have only a minor effect on the euro region’s economy, Luxembourg’s Jean-Claude Juncker said yesterday after leading a meeting of European finance ministers in Brussels. “We’ve got more to go” for the rally in emerging markets, said Mobius, who favors United Arab Emirates developers including Emaar Properties PJSC that tumbled more than 10 percent this week. “We’re going to see a very fast recovery, and the results of companies’ earnings are going to surprise on the upside.” China, Egypt Benchmark equity indexes in China, Egypt and Turkey climbed more than 1 percent, while the extra yield investors demand to own emerging-market bonds over U.S. Treasuries fell for a second day. The Philippine peso and South Korea’s won strengthened more than 0.6 percent against the dollar to lead gains among developing-nation currencies. Dubai World, the state-controlled investment company, is in talks with its lenders to restructure $26 billion of debt, easing concern that a default would add to the $1.7 trillion financial companies around the world have written down as the credit crisis impaired the value of their assets. The cost of protecting Dubai’s government debt from default was little changed today, after tumbling 30 percent since Nov. 27, according to CMA DataVision prices at 9:50 a.m. in London. Credit-default swaps on the nation fell 9 basis points to 451, while contracts on Saudi Arabia were down 4 basis points at 93 and Abu Dhabi declined 2.5 to 126. The yen lost 0.9 percent against the euro and 0.8 percent versus the dollar after Japanese Prime Minister Yukio Hatoyama was cited by the Nikkei newspaper as saying the currency’s strength can’t be left as it is. Chief Cabinet Secretary Hirofumi Hirano said later Hatoyama wasn’t suggesting the government is ready to intervene. The yen has strengthened 3.8 percent versus the U.S. currency this year and traded at a 14- year high of 84.83 per dollar on Nov. 27. Japan should “call for international intervention” to stem the yen’s advance, Financial Services Minister Shizuka Kamei said in an interview in Tokyo today. Commodity Currencies The dollar lost most against the currencies of commodity- producing countries, dropping 0.6 percent versus Norway’s krone and 0.4 percent compared with the New Zealand dollar. Gold for immediate delivery rose as much as 1.7 percent in London, extending its annual jump to 38 percent. Silver, platinum and palladium also gained. Among industrial metals, aluminium for delivery in three months advanced 1.1 percent to $2,127 a metric ton on the London Metal Exchange. Crude oil for January delivery fell 0.5 percent to $77.98 a barrel in New York. The MSCI World Index of 23 developed nations’ stocks was little changed. Asian stocks rose for a third day, lifting the MSCI Asia Pacific Index to a six-week high. BlueScope Steel Ltd., Australia’s largest steelmaker, jumped 2.8 percent in Sydney after saying demand is improving. Zijin Mining Group Co., China’s largest gold company, gained 3.4 percent in Hong Kong. European Stocks Europe’s Dow Jones Stoxx 600 Index was little changed. Banking shares declined after Credit Suisse AG said U.K. banks are “still not cheap enough” after a 9.9 percent drop for the FTSE 350 Banks Index since this year’s high in September. HSBC Holdings Plc, the region’s biggest lender, dropped 1.5 percent in London. Royal Bank of Scotland Group Plc, the U.K.’s largest state-controlled bank, tumbled 5.7 percent. U.S. stock futures were little changed before a report that may show that companies in the U.S. eliminated an estimated 150,000 jobs in November, according to the median of 32 economists in a Bloomberg News poll. The report from ADP Employer Services is due at 8:15 a.m. New York time. Payrolls fell by 123,000 workers this month, the smallest drop since March 2008, according to the median of 78 analysts surveyed by Bloomberg News ahead of a Dec. 4 Labor Department report. The unemployment rate probably held at 10.2 percent, a 26-year high. The Organization for Economic Cooperation and Development forecasts that the economies of its 30 member countries will expand 1.9 percent next year and 2.5 percent in 2011 as demand from China and other emerging market countries accelerates. The group’s economies expanded 0.8 percent in the third quarter. -- With assistance from Paul Armstrong, David Merritt, Stuart Wallace and Justin Carrigan in London and Bernard Lo in Hong Kong. Editors: Paul Sillitoe, Mark Gilbert To contact the reporter on this story: Michael Patterson in London at mpatterson10@bloomberg.net.

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