* MSCI world equity index unchanged at 295.85
* HSBC's upbeat report lifts banks; ZEW weighs on euro
* Sterling falls on Fitch warning; oil falls
By Natsuko Waki
LONDON, Nov 10 (Reuters) - World stocks held near a two-week
high on Tuesday, underpinned by positive reports from UK banks
and hopes that policymakers would keep easy monetary policy,
while a downbeat German sentiment survey weighed on the euro.
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, while
U.S. stock futures fell a day after Wall Street rose to a
13-month high.
"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.
"At some point, we believe markets will require clearer
evidence that corporate revenue growth is sustainable, and
unless or until that occurs, we should see some continued
back-and-forth action in the markets."
MSCI world equity index <.MIWD00000PUS> was steady, while
the FTSEurofirst 300 index <> slipped 0.1 percent. In Asia
<.MIAPJ0000PUS> emerging stocks rose 0.5 percent.
Emerging stocks <.MSCIEF> rose 0.3 percent.
"There's feeling that confidence is returning as we head
into the Christmas period," said Brian Myers, analyst at ODL
Securities.
U.S. stock futures were down around 0.3 percent <SPc1>.
U.S. crude oil <CLc1> fell 0.2 percent to $70.30 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> rose 33 ticks and the
euro fell to $1.4984 <EUR=> after a ZEW survey showed German
sentiment fell for the first time in three months to hit its
lowest level since July.
Sterling fell as low as $1.6600 <GBP=D4>, before recovering
to $1.6671, 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 0.2 percent against a basket of
major currencies although it was close to the previous day's
15-month low.
(Editing by Andy Bruce)
