* MSCI world equity index up 0.1 pct at 296.16
* HSBC's upbeat report lifts banking sector
* Sterling falls on Fitch warning; oil falls below $79/bbl
By Natsuko Waki
LONDON, Nov 10 (Reuters) - World stocks ticked higher on
Tuesday as positive reports from UK banks kept the momentum with
investors who chased risky assets in anticipation countries
would keep monetary policy accommodative.
Sterling fell broadly after a warning on Britain's triple-A
credit rating while the dollar held near a 15-month low as
investors bought higher-yielding currencies.
HSBC shares rose 2 percent <HSBA.L> after the bank said its
underlying third quarter profits were significantly ahead of a
year ago and loan impairment charges fell.
Barclays <BARC.L> said strong investment banking helped
limit a fall in profit in the third quarter, adding it expected
bad debts to peak earlier than it had previously expected. It
also said it would restart dividends next month.
They have joined a batch of rivals including Goldman Sachs
reporting strong third-quarter results as capital markets and
trading activity remained lively. Promises by G20 nations to
keep economic stimulus in place until recovery was assured also
helped risky assets.
Gains in European shares were limited however as investors
consolidated their holdings after a four-session rally.
"Monetary and fiscal stimulus has clearly taken hold, and
has resulted in an initial growth spurt that has been sharp and
fast," noted Bob Doll, chief investment officer for global
equities at BlackRock.
"Equity markets should be able to continue to gain, at least
until global policymakers shift into tightening cycles. From our
perspective, we believe we are at least several months away from
that happening."
MSCI world equity index <.MIWD00000PUS> rose 0.1 percent,
while the FTSEurofirst 300 index <> gained 0.2 percent. In
Asia <.MIAPJ0000PUS> emerging stocks rose 0.5 percent.
Emerging stocks <.MSCIEF> rose 0.3 percent.
U.S. crude oil <CLc1> fell 0.7 percent to $78.83 a barrel
after tropical storm Ida, which cut U.S. oil and gas supplies,
was downgraded from a powerful hurricane and U.S. crude oil
stockpiles were forecast to rise slightly.
Oil prices have risen 77 percent so far this year but they
are still nearly 47 percent below their high of more than $147 a
barrel struck in July last year.
The December bund futures <FGBLc1> was unchanged as the
market braced for fresh supply of government bonds. The
Netherlands will sell up to 3.5 billion euros of bonds due 2012
on Tuesday, a day before Germany issues 6 billion euros of
10-year Bunds.
Sterling fell as low as $1.6600 <GBP=D4>, before recovering
to $1.6649, after Fitch said that of the four major economies
with AAA status, Britain was the most at risk.
"The Fitch report shows that the fiscal expansion comes at
increasingly high costs, which will ultimately widen gilt
spreads and undermine sterling," BNP Paribas said in a note to
clients.
The dollar <.DXY> was up 0.1 percent against a basket of
major currencies although it was close to the previous day's
15-month low.
