LONDON, Nov 26 (Reuters) - Debt problems in Dubai sent banks and auto stocks sliding, contributing to a 2.1 percent fall in European shares on Thursday, with energy and mining stocks hurt by lower commodity prices.

By 0945 GMT, the FTSEurofirst 300 was down 22.74 points at 999.21 after it rose 0.5 percent in the previous session.

Banks were the biggest drag on the index as concerns on the health of the global financial system resurfaced as Dubai said two of its flagship firms planned to delay repayment on billions of dollars of debt.

Barclays, HSBC, BNP Paribas and Deutsche Bank fell between 3.7 and 5.3 percent.

"Certainly the Dubai debt debacle and the uncertainty that it has created as a results of the Kingdom's forthcoming holiday has had a severe knock on effect on European equity markets, as well as throwing the bond market in to turmoil," said David Buik, senior partner at BGC Partners.

London Stock Exchange fell 4 percent as traders cited concern that Bourse Dubai held a substantial stake in the company.

Porsche fell 7 percent, as traders pointed to worries that Qatar Investment Authority may cut its 10 percent stake in the carmaker to boost liquidity after the Dubai government asked for a debt standstill on two of its firms.

Shares in luxury auto peer Daimler fell 4.7 percent. Aabar Investments from Abu Dhabi owns a 9.1 percent stake in the company and Kuwait owns a 6.9 percent stake. The DJ Stoxx auto index was down 3.8 percent.

Prices of base metal and crude were weaker, hurting mining stocks and energy majors.

Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo were down 0.5 and 3.6 percent, while BP and Shell lost 0.5 and 1.1 percent respectively.

U.S. markets are closed on Thursday for Thanksgiving Day.

France's CAC, Germany's DAX and Britain's FTSE 100 were off between 1.8 and 2.2 percent. (Reporting by Simon Falush; Editing by Mike Nesbit) Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2 (simon.falush@reuters.com. +44 20 7542 7681) Reuters Messaging: simon.falush.reuters.com@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.