PARIS, Nov 27 (Reuters) - European stock index futures pointed to a sharply lower open on Friday, following the previous session's 3.3 percent sell-off, on mounting fears over Dubai's debt woes.

By 0722 GMT, futures for the DJ Euro Stoxx, for Germany's DAX and for France's CAC were down 1.6-2.1 percent.

"The fear in the markets is that this is only the first instance of a wave of governments with unsustainable debt to GDP ratios that will start reporting trouble paying off their debt. Furthermore, fear is that this process will accelerate even further when interest rates are heading north during 2010," said Christian Blaabjerg, chief equity strategist at Saxo Bank.

"We expect this sentiment to continue into today's European session and seeing a continuation of the sell-off. However we expect short term that this is only a bump on the road. We expect a reversal to normal waters when U.S. re-enters the stage of finance Monday next week."

Asian shares sank on Friday, with Japan's Nikkei dropping more than 3 percent, as the Dubai shockwaves hit the region, with banking stocks taking a beating and the yen rising to a fresh 14-year high against the dollar as investors unwound risky trades.

European heavyweight energy and mining shares will feel the pinch of falling commodity prices. Crude oil prices extended their decline from the previous day to fall to $76 a barrel on Friday and metal prices also dropped.

European shares tumbled 3.3 percent on Thursday to record their biggest one-day percentage drop in seven months, as banking shares plummeted on concerns over their exposure to Dubai.

"The issue has certainly put some risk back into the market and in turn, seriously wounded investors' risk appetites," said Ben Potter, analysts at IG Markets.

"Yes, some of the big European and U.S. banks are likely to have exposure to (Dubai) but its unlikely to 'sink the boat' so to speak, especially given what financials have been through over the last 18 months."

U.S. markets, closed on Thursday for Thanksgiving Day, were poised to track European and Asian losses on Friday. At 0605 GMT, futures for the S&P 500 were down 2.97 percent, Dow Jones futures were down 2.3 percent and Nasdaq 100 futures were down 3.14 percent.

The FTSEurofirst 300 index of top European shares has gained 53 percent since reaching a record low in March, but it has lost nearly 5 percent since reaching a peak earlier this month.

----------------------MARKET SNAPSHOT AT 0716 GMT----------------------

NIKKEI 9,081.52 -3.22 % -301.72
MSCI ASIA EX-JP 454.25 -3.82 % -18.04
EUR/USD 1.492 -0.67 % -0.0101
USD/JPY 85.84 -0.81 % -0.7000
10-YR US TSY YLD 3.171 -- -0.10
10-YR BUND YLD 3.125 -- -0.01
SPOT GOLD $1,169.15 -1.97 % -$23.45
US CRUDE $74.56 -4.36 % -3.41

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TOPWRAP-Dubai debt delays revive fear of financial crisis

GLOBAL MARKETS-Asia shares skid as Dubai debt worries spread

Nikkei slides on yen, Dubai to mark 5th losing week

FOREX-Yen surges as Dubai woes put investors off risk

Oil falls to $76 amid Dubai debt jitters

TREASURIES-Advance in Asia as risk shed on Dubai woes

Gold falls on dlr, hedging demand cited on dips

Shanghai copper falls on Dubai woes, dollar

COMPANY NEWS:

ING

ING priced its rights issue at 4.24 euros per new share at a discount comparable to recent European rights issue, which will dilute ING's shareholders' holdings by nearly 90 percent. The offer price represents a 52.4 percent discount to Thursday's closing price of 8.916 euros and a 37.3 percent discount to the theoretical ex-rights price, the weighted average price of Thursday's close plus the new issue price. For details, see:

SPANISH BANKS

The Bank of Spain is considering raising provisions made for property by banks to 30 percent of the value of the assets, from 20 percent due to be implemented for 2009, according to newspaper ABC.

FRANCE TELECOM

Europe's third-biggest telecom operator signed a deal with its labour unions to set up a part-time work plan for older staff, which could cost the firm up to 1 billion euros. For details, see:

EDF, ENI

The CEO of Italian oil and gas group Eni said Russia and France would sign a memorandum of understanding, which would bring EDF into the South Stream gas project. Eni and Russian gas giant Gazprom are already joint partners on the project. For details, see:

RENAULT

The French automaker is expected to announce its plan on Friday to help its near-bankrupt Russian partner AvtoVAZ. The deal on AvtoVAZ, which is 25 percent owned by Renault, is expected to be signed at the Franco-Russian government seminar to take place in Rambouillet, just outside the French capital. For details, see:

E.ON

The European Commission is probing a unit of the German utility firm about potential anti-competitive behaviour -- whether its Ruhrgas subsidiary limited transport capacity in the gas network -- German daily Financial Times Deutschland said in its Friday edition.

VOLKSWAGEN

Europe's largest carmaker, plans to invest up to 6.2 billion reais ($3.5 billion) between 2010 and 2014 in Brazil to meet growing demand for automobiles, the head of its unit in the country said on Thursday. Related news

LLOYDS BANKING GROUP

The lender's shares trade ex-rights on Friday following overwhelming support for its records rights issue at an EGM on Thursday.

ABB

ABB is reorganising its automation divisions to align them more closely with their customers and boost growth, the Swiss engineering group said on Friday.
(Reporting by Blaise Robinson, editing by Atul Prakash)

Keywords: MARKETS EUROPE FACTORS (blaise.robinson@reuters.com ; +33 1 4949 5269, Reuters Messaging: blaise.robinson.reuters.com@reuters.net)

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