* Stocks recover as Dubai contagion fears recede
* UAE's central bank offers emergency support
* South Korean authorities pledge vigilance
* Yen falls from 14-year highs, dollar weak
* UAE shares dive as markets open for first time after crisis (Refiles to fix typo in line 47 to say Abu Dhabi)
By Umesh Desai
HONG KONG, Nov 30 (Reuters) - Asian stocks recovered after last week's steep sell-off over the Dubai debt crisis on growing speculation the fallout from a potential default will be limited, while assurances from various authorities also helped calm nerves.
European stock index futures pointed to a higher open,
futures for the Eurostoxx 50
Banking shares, which bore the brunt of the selling on Friday on worries about banks' exposure to Dubai World and property group Nakheel, were at the forefront of Monday's rebound in Asia.
"I think it's going to be okay. At the end of the day Dubai and Abu Dhabi need each other. And there will be a lot of pressure on Abu Dhabi to step in, from the neighbouring countries," Templeton Asset Management fund manager Mark Mobius told Reuters.
Hong Kong shares, which posted their biggest single day loss in eight months on Friday, and stocks in Japan, which ended last week at a four-month low, were among the strongest performers in the region on Monday.
In South Korea, the government pledged it will stay vigilant while a top Indonesian central banker said there would be no fallout from Dubai's debt problems on Southeast Asia's biggest economy.
South Korean markets have been especially sensitive to international financial instability mainly because the highly leveraged local banking system is heavily exposed to the global credit market situation.
The MSCI index of Asia Pacific stocks traded outside Japan <.MIAPJ0000PUS> rose 2.8 percent while the Thomson Reuters index of regional shares <.TRXFLDAXPU> was 2.6 percent higher.
Reflecting some of the calm, U.S. stock futures
However, stocks in the United Arab Emirates, trading for the first time since the call for a delay in repaying billions of dollars in debt, dived with Dubai's index <.DFMGI> down 6.9 percent and Abu Dhabi's share benchmark <.ADI> 8.1 percent lower.
The dollar surrendered some of last week's gains against other major currencies and the yen retreated from a 14-year high hit last week. The two units rose sharply last week as fears of a possible Dubai debt default led to unwinding of carry trades.
AUTHORITIES SOOTHE NERVES
Investors were also placated by authorities' moves to prevent any major fallout from a looming debt default by two of Dubai's flagship firms.
Financial markets shuddered last week after Dubai said it would ask creditors of state-owned Dubai World and Nakheel, the builder of its palm-shaped islands, for a standstill agreement as a first step toward restructuring billions of dollars of debt. [ID:nGEE5A02FN].
On Sunday, the United Arab Emirates offered banks emergency support to ease fears in financial markets although analysts say the move to inject liquidity into Dubai's banks by the central bank, together with promises by neighbouring city-state Abu Dhabi to provide selective support, was the bare minimum they could do.
In Seoul, Vice Finance Minister Hur Kyung-wook said the government would maintain a daily monitoring system until the Dubai incident was resolved.
Indonesia's central bank deputy governor said the country is not expected to feel any fall-out from Dubai's debt problems while the Philippine central bank governor said the crisis was not seen having a major impact on remittances from the Filipino diaspora.
About a tenth of the Philippines' 91 million people live and work abroad and their remittances are vital to domestic spending.
Investors also took heart from Wall Street's truncated losses, raising hopes the flight to less risky assets seemed to be subsiding. U.S. stocks recovered slightly towards close after a slide of more than 2 percent at the open.
"The fall in U.S. stocks wasn't as bad as expected and that has lifted one of the biggest Dubai-related concerns, given that worries about that don't seem to be as bad as they once were," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
BANKS LEAD REBOUND
Leading the recovery were bank and construction shares, which were the big losers last week as investors cut exposure to sectors most vulnerable to economic uncertainty.
HSBC Holdings <0005.HK>, which fell 7.59 percent to close at a three-week low on Friday, climbed over 4 percent. Standard Chartered <2888.HK>, which fell as much as 8.9 percent to a seven-week low last Friday, was also more than 4 percent higher.
Britain's HSBC
The MSCI index of banking shares in Asia Pacific outside Japan <.MIAPJFN00PUS> was up 3.7 percent while the materials index <.MIAPJMT00PUS> was 3 percent higher.
But stocks with exposure to Dubai continued to suffer.
These included Singapore's DBS Group
Japan's Nikkei average <.N225>, which hit a four-month closing low last Friday, gained 2.9 percent as the yen's fall from a 14-year high against the dollar also lifted exporters. (Additional reporting by Parvathy Ullatil in HONG KONG and Elaine Lies in TOKYO; Editing by Kazunori Takada) ((umesh.desai@thomsonreuters.com; +852 2843 6935; Reuters Messaging: umesh.desai.reuters.com@reuters.net; )) ((If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)) ((For the state of play of Asian stock markets please click on: <0#.INDEXA>))
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