* Banks fall on renewed concerns over Dubai exposure

* Defensive drugmakers in demand

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Dominic Lau

LONDON, Dec 8 (Reuters) - European shares were lower at midday on Tuesday, led by banking stocks on renewed concerns over exposure to Dubai World, while weak German industrial output also weighed on sentiment.

The FTSEurofirst 300 of top European shares was down 1.4 percent at 1,006.49 points by 1222 GMT, after losing 0.5 percent in the previous session.

Banks were among the top losers, with traders citing a report about the size of losses facing Nakheel, a unit of Dubai World, as one of the key reasons.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), HSBC (HSBA.L: Quote, Profile, Research), Banco Santander (SAN.MC: Quote, Profile, Research), Societe Generale (SOGN.PA: Quote, Profile, Research) and Standard Chartered (STAN.L: Quote, Profile, Research) were down 1.5-6 percent.

"Basically it was two things. First of all it was the German figures but, more importantly, Nakheel had a first half loss of $3.65 billion a document showed according to Bloomberg News," a trader said.  Continued...

Read more @ http://uk.reuters.com/article/idUKGEE5B70UR20091208

* Banks weighed on by Dubai debt exposure worries

* Commodity stocks under pressure

* Tesco down as Q3 sales growth disappoints

 

By Tricia Wright

LONDON, Dec 8 (Reuters) - Britain's top share index fell 1.6 percent on Tuesday, led down by banks on fresh worries over Dubai debt exposures and caution ahead of Wednesday's UK pre-budget report and with Tesco (TSCO.L: Quote, Profile, Research) hurt by disappointing Q3 numbers.

By 1237 GMT the FTSE 100 index .FTSE was down 84.61 points at 5,226.05, near its lows for the session.

Weakness in banking shares was the biggest drag on blue chip sentiment with investors concerned over their exposure to Dubai's debt, and worries about a possible windfall tax on banks being introduced by finance minister Alistair Darling in his pre-budget report on Wednesday.

Royal Bank of Scotland (RBS.L: Quote, Profile, Research) slid 8.8 percent, also impacted by a WestLB downgrade to "sell" from "reduce", with HSBC (HSBA.L: Quote, Profile, Research), Barclays (BARC.L: Quote, Profile, Research), Standard Chartered (STAN.L: Quote, Profile, Research) and Lloyds Banking Group (LLOY.L: Quote, Profile, Research) down 0.8 to 3.5 percent.  Continued...

Read more @ http://uk.reuters.com/article/idUKGEE5B719S20091208?pageNumber=1