* Sold UK, French, Spanish govt debt
* Raised exposure to US, Japan, Mexico, South Korea, Russia
* Increased share of stocks in portfolio at expense of bonds
OSLO, Nov 2 (Reuters) - Norway's $660 billion sovereign wealth fund cut its exposure to Europe's troubled economies further in the third quarter, buying into global shares instead as it rode a global stock market rally.
The oil fund, one of the world's biggest investors, said it had cut its exposure to government debt in France, Spain and Britain, and continued to keep minimal or no exposure to Greece, Ireland and Portugal, it said.
The fund, which holds $130,000 for each of Norway's 5 million people, has been gradually pulling out of euro zone assets, especially those on the bloc's periphery, and aims to cut Europe's weight in its portfolio permanently.
It only gives a detailed breakdown for its top ten equity and fixed income holdings, so there was no further detail on how much the fund had cut back its Spanish exposure.
It cut its holdings of French government debt by 17 percent to 58.9 billion Norwegian crowns ($10.4 billion).
Instead of Europe, the fund favours major emerging and developed economies and increased its exposure to fixed income in the U.S., Japan, Mexico, South Korea and Russia, it said in a report.
The fund returned 4.7 percent on its investments in the quarter, improving on a second quarter loss of 2.2 percent and lifted the share of stocks in the portfolio to 60.3 percent from 59.6 percent three months earlier.
"The result was largely driven by a rally in global stock markets," Yngve Slyngstad, the fund's chief executive said. "Stocks gained the most in Europe, where the fund has about half of its shareholding."
Global investors boosted equity holdings to their highest in six months in October but unlike Norway, they also lifted their holdings of euro bond holdings, a Reuters poll showed this week. .
The survey of 46 funds in the United States, continental Europe, Britain and Japan showed investors grew increasingly confident that the worst of the euro zone has passed and also preferred stock on efforts by major central banks to bolt interest rates to near zero.
The Norwegian fund, which manages the country's surplus oil revenue, is expected to grow to 3.793 trilllion crowns ($664 billion) by the end of this year and 4.281 trillion crowns ($750 billion) by the end of 2013.