GLOBAL MARKETS-Stocks rise after HSBC; dollar firmer

(Updates with Wall Street outlook, fresh prices)

By Natsuko Waki

LONDON, May 12 (Reuters) - World stocks rose on Monday, supported by better-than-expected first-quarter results from HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) which eased concerns about the banking sector, while the dollar firmed towards last week's two-month peak.

Major financial markets were calm after China's southwest province of Sichuan was hit by a strong earthquake, felt across much of China and as far west as Bangkok.

Shanghai stocks fell around 1 percent before closing up on the day, while the yuan <CNY1MNDFOR=> slipped in offshore non-deliverable forwards against the U.S. dollar.

A firmer dollar tamed recent rallies in energy and commodity prices, with oil falling from last week's record high and gold slipping.

HSBC took bad debt charges related to its U.S. consumer finance business of $3.2 billion, much smaller than expected. It also said first-quarter profits were higher than the same period last year as growth in Asia and elsewhere helped counter a hit from its exposure to U.S. home loans.

HSBC's announcement has added to growing investor expectations that banks are making efforts to clean up their balance sheets hit by the nine-month-old credit crisis and that the worst of the financial turmoil may have passed.

"There are signs that the financial market crisis is easing. Financial institutions are starting to offload bad loans and recapitalise," said Christine Li, European economist at Moody's research arm Economy.com.