By Brian Gorman

LONDON, Nov 26 (Reuters) - European shares fell sharply on Thursday, hurt by debt problems in Dubai that sent bank stocks lower while commodity shares slipped on weaker crude and metals prices.

At 1213 GMT, France's CAC and Germany's DAX were down 1.7 and 1.8 percent respectively. Britain's FTSE 100 was indicated 1.9 percent down before trading halted at the London Stock Exchange due to technical difficulties.

The LSE said all London shares prices were indicative.

The FTSEurofirst 300 index of top European shares was indicated at 1,002.98 points, down 2 percent, after hitting a three-week low.

Financial shares were the biggest drag 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.

BNP Paribas, Banco Santander, Barclays , Credit Suisse, Deutsche Bank, HSBC, and UniCredit were down between 2.7 and 4.6 percent.

The European benchmark index is still up more than 54 percent from its lifetime low of March 9, as investors have become more confident on the prospects for economic recovery.

"It (the Dubai credit issue) does bring to the fore that much of what we have seen in the markets really has been supported by liquidity," said Georgina Taylor, equity strategist, Legal & General Investment Management.

"It shows how vulnerable the market still is to newsflow," she said. "But it should be seen as a country-specific issue. It's not something systemic. It's about risk appetite. It's a reason for some of those involved in the market to scale back a bit, while we try to understand what's going on."

Shares in the London exchange were indicated 4.2 percent down as traders cited concern that Bourse Dubai held a substantial stake in the company. This added to a 3.8 percent decline on Wednesday, when the operator reported a fall in first-half profit.

Porsche fell 6.9 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's debt standstill request.

MINERS FALL

Mining stocks fell, tracking lower metals prices. Gold prices fell back from a record high of $1,194.90, as the dollar rebounded from lows.

Rio Tinto, Xstrata, Lonmin, Anglo American, Kazakhmys and Fresnillo were down between 2.8 and 4.1 percent.

Chilean copper miner Antofagasta Plc's fell 3.9 percent after nine-month core profit almost halved due to weak copper prices and a decline in output.

Crude futures fell 1.1 percent to trade near $77 a barrel. Total, ENI, BP, BG, Royal Dutch Shell, Repsol and StatoilHydro lost between 0.91 and 2.1 percent.

UK insurer Legal & General fell 4 percent, after Citigroup cut its rating to "sell" from "hold", pointing to "strategic challenges"..

U.S. markets, which rose to fresh 13-month closing highs on Wednesday, are shut for Thanksgiving Day.

Some analysts continued to point to the effect of stimulus measures being withdrawn, saying this will cause the market to suffer.

European Central Bank Governing Council member Axel Weber said central bank and government support cannot be increased further and is no substitute for a self-sustaining recovery. (Additional reporting by Simon Falush; Editing by John Stonestreet) 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 (brian.gorman@thomsonreuters.com; +44 20 7542 9128; Reuters Messaging: brian.gorman.thomsonreuters.com@reuters.net)

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