European shares fall on Dubai fears as banks slip

European shares fell to their lowest close in more than three weeks yesterday, with oil companies among the biggest losers, as worries about Dubai's debt continued to unsettle global equity markets.

The FTSEurofirst 300 Index of top European shares fell 1.4 per cent to 985.30 points, the lowest close since November 4.

The index rose 0.9 per cent in November and is up more than 52 per cent from the lifetime low it hit on March 9. Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 all ended the day 1.1 per cent lower.

Dubai's government said yesterday 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.

Yesterday, Dubai's benchmark index closed 7.3 per cent lower.

"We don't see this as a turning point. We're not down that far from the recent peak," said Teun Draaisma, equity strategist at Morgan Stanley, in London.