GLOBAL MARKETS-Stocks rise as risk favoured; sterling down
* 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 .FTEU3 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.
