By Stuart Wallace Nov. 30 (Bloomberg) -- Emerging-market stocks rebounded while European equities fell as investors assessed a pledge by the United Arab Emirates to back Dubai banks and ease the region’s debt crisis. U.S. equities fluctuated while the dollar and Treasuries dropped. The MSCI Emerging Markets Index rallied 1.4 percent at 9:59 a.m. in New York and the MSCI World Index of equities in 23 developed countries advanced 0.4 percent. Europe’s Dow Jones Stoxx 600 Index fell 0.9 percent. The dollar weakened against 11 of 16 major currencies tracked by Bloomberg. The United Arab Emirates’ central bank said it “stands behind” Dubai’s local and foreign lenders after the request by government-controlled Dubai World for a standstill agreement with creditors threw doubt on $59 billion of liabilities. The announcement hit stock markets around the world, reducing global market value by 2.5 percent to $48.1 trillion last week. Dubai’s Department of Finance today said the emirate’s government hadn’t guaranteed Dubai World’s debt. “It’s certainly not the best-case solution that the market was looking for,” Beat Siegenthaler, chief emerging-market strategist at TD Securities Ltd. in London, said in a Bloomberg Television interview. “It’s what the market expected but it’s not more than the market expected. The question is: What will happen with Dubai World and other state affiliated companies?” Monthly Advance European stocks fell, trimming the Stoxx 600’s monthly gain to 1.1 percent. Bank of Ireland Plc slid 3.8 percent in Dublin after saying it may report a loss of 3.4 billion euros ($5.1 billion) on loans it sells to the country’s so-call bad bank. U.S. stocks fluctuated after the National Retail Federation indicated that consumers spent less than last year during the Thanksgiving holiday. The S&P 500, the benchmark gauge of U.S. equities, has risen 5.3 percent in November, rebounding from its first monthly decline since the index reached a 12-year low in March. Abu Dhabi’s ADX General Index sank 8.3 percent, the most since Bloomberg began compiling the data in 2001. The Dubai Financial Market General Index tumbled 7.3 percent, the most in a year, on the first trading day since the government said Nov. 25 that Dubai World may delay debt payments. Markets were closed through Nov. 29 for the Eid Al Adha holiday. Credit-default swaps on Dubai fell 59 basis points to 588 and contracts on Dubai World unit DP World, the Middle East’s biggest port operator, dropped 100 to 644, according to CMA DataVision prices. Swaps linked to neighboring Abu Dhabi fell 28 basis points to 147 and Qatar declined 8 to 112, CMA prices show. China Rallies The Shanghai Composite Index rose 3.2 percent for the biggest gain among indexes in major emerging markets. India’s Bombay Stock Exchange Sensitive Index added 1.8 percent as the government said the economy grew at the fastest pace in 1 1/2 years last quarter, beating economists’ estimates. The dollar declined as waning concern that Dubai World may default fanned demand for higher-yielding assets. The U.S. currency fell 0.8 percent compared with the Australian dollar. The South Korean won led gains against the dollar, strengthening 1.1 percent. Treasuries slipped, with the yield on the 10-year note rising four basis points to 3.24 percent, its first gain in more than a week. Dollar Reversal “The dollar has retraced the final part of last week’s gains related to the Dubai World uncertainty, with equity markets in Asia higher and equity markets in the Middle East not showing signs of contagion,” Derek Halpenny, the European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd., wrote in a report today. Gold for immediate delivery fell 0.5 percent to $1,171.45 an ounce in London following four consecutive weekly gains. Copper for March delivery added 0.2 percent to $3.1315 a pound in New York as a weaker dollar boosted demand for the metal as a hedge against inflation. Oil for January delivery was little changed at $76.17 a barrel in New York. To contact the reporter on this story: Stuart Wallace in London at swallace6@bloomberg.net

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