* Globally, stocks steady after Asia gains
* European stocks down 1 percent
* Wall Street set for fall
* Dollar slightly higher
By Jeremy Gaunt, European Investment Correspondent
LONDON, May 11 (Reuters) - Global shares held steady on
Monday, working on their third consecutive month of gains, but
there were losses in Europe after recent gains and Wall Street
looked set for a poor start.
HSBC <HSBC.L>, Europe's biggest bank, said first-quarter
profits were "well ahead" of last year, swelled by record
results in its investment bank, but would have been down without
accounting gains on its debt. []
The news neither rattled the European market nor eased its
fears about the state of banking.
Globally, investors were generally lifted by last week's
smaller-than-expected number of job losses in the United States,
which reinforced expectations that the global economy, while
still weak, may have hit bottom.
MSCI's all-country world stock index <.MIWD00000PUS> was
flat to slightly higher, having gained 6 percent so far this
year. This came after Asian shares rose to their highest level
in seven months.
But European started the week on a down note,
The FTSEurofirst 300 <> index of top European shares
was down 1.0 percent after ending 1.7 percent higher at a
four-month closing high on Friday.
The index has gained about 33 percent since hitting a record
low in early March.
"We have good chances for a further positive development but
the big picture still sounds a note of caution," said Roger
Peeters, strategist at Close Brothers Seydler.
As well as signs of improvement in the world economy, U.S.
company results have generally been positive.
Thomson Reuters research shows that of the 424 S&P 500
<.SPX> companies that have reported Q1 2009 earnings to date, 65
percent have reported earnings above analyst expectations and 28
percent below forecasts.
In aggregate, companies in the S&P 500 are reporting
earnings that are 6.0 percent above estimates, which is well
above the -9.5 percent average over the past eight quarters, it
said in a weekly note.
HIGHER DOLLAR
The dollar inched higher on Monday, after earlier hitting
its lowest in seven weeks against the euro.
Emboldened earlier by slowing U.S. job losses on Friday,
investors in Asia diversified into other currencies, pushing the
dollar index <.DXY> to a fresh four-month low on hopes the worst
of the economic slump may be over.
But concerns about banks took the shine off the positive
sentiment and supported the dollar.
"We had a big squeeze up during Friday and into this
morning, especially in terms of euro/dollar which went up
towards the $1.37 resistance," said Rabobank strategist Jeremy
Stretch.
"But while we have seen some caution this morning that's
capped the dollar's slide, the direction in the short-term is
still going to be determined by equity markets sentiment and
global recovery prospects."
The euro hit a seven-week high at $1.3670 on trading
platform EBS at one point but later reversed course to stand at
$1.3591 <EUR=>, 0.4 percent down from late U.S. trade on Friday.
Euro zone government bonds rose as European shares fell.
The two-year Schatz yield <EU2YT=RR> was down 2 basis points
at 1.315 percent, while the 10-year Bund yield <EU10YT=RR> was
down 6 basis points at 3.400 percent.
(Additional reporting by Christoph Steitz and Kirsten Donovan;
Editing by Victoria Main)
