World stocks hold near earlier all-time highs

LONDON (Reuters) - World stocks held near all-time highs hit earlier on Wednesday while the dollar kept above a recent record low as more disclosure by banks on their exposure to credit-related losses calmed investors' jitters.

Wall Street was set for a weaker open after a rally earlier this week while government bonds were higher before a key U.S. services survey due later which would give clues on whether the Federal Reserve will cut interest rates again this year.

Deutsche Bank (DBKGn.DE) became the latest bank to disclose credit-related losses. This added to investors' expectations that the worst of the crisis is over and helped investors to shift their focus back to strong economic and corporate fundamentals.

"It's reflecting the fact that now that we know, we no longer have to guess. So this brings more certainty than the vague worries that we had before. Risk aversion is dropping quite significantly just because we now know," said Arthur van Slooten, strategist at Societe Generale in Paris.

The MSCI main world equity index .MIWD00000PUS was up 0.2 percent on the day, having hit a record high earlier. The index is up 14 percent since January.

Emerging markets have been on the boil, with MSCI's Asia ex-Japan index .MIAPJ0000PUS and broader emerging index .MSCIEF hitting record highs before trimming gains. Both indexes are up more than 30 percent since January.

"Equities appear to have been on drugs lately and have chosen to look beyond the poor Q3 results from banks," Calyon said in a note to clients.

The FTSEurofirst 300 index .FTEU3 was steady on the day, having dipped in and out of negative territory early in Europe.

Deutsche Bank (DBKGn.DE) said net profit was expected to rise to more than $2 billion in the third quarter despite more than $3 billion in write-downs in the wake of the credit turmoil.

A survey showed euro zone services growth suffered its biggest slowdown in at least nine years in September as financial turmoil hurt businesses and new orders.

The closely-watched ADP report showed the U.S. private sector added 58,000 jobs in September, in line with forecast.

LENDING RATES REMAIN ELEVATED

Money markets are trading more cautiously, with three-month euro interbank lending rates falling only slightly from this week's six-year high at their daily fixing. Rates are still nearly 80 basis points above the European Central Bank's benchmark rate.

Demand for cash covering the new year period, persistent reluctance among banks to lend to each other, and expectations for no change in euro zone interest rates have kept rates at elevated levels.

The dollar stood at $1.4198 per euro, above this week's record low beyond $1.42.

The iTraxx Crossover index, the most widely watched indicator of European credit market sentiment, was slightly tighter on the day at 315 basis points, while emerging sovereign spreads tightened 1 bps.

The December Bund future was up 19 ticks.

London Brent crude was up 0.3 percent on the day, below recent record highs, while gold edged towards this week's 28-year high.

-- Additional reporting by Blaise Robinson