* Oil, stocks pause for breath
* Miners, banks hit by weak earnings
* Sterling still under Brexit pressure
By Jamie McGeever
LONDON, Feb 23 (Reuters) - The recovery in riskier assets fizzled out on Tuesday as stocks, oil and the value of China's yuan currency reversed some of their recent rise, a shift that benefited safe-haven assets like the Japanese yen and gold.
Oil fell as much as 2.5 percent and the main European stock indices more than 1 percent before settling down. Oil had risen more than 5 percent on Monday and world stocks recorded their biggest rise last week since early October.
Sterling languished near Monday's seven-year low against the dollar after Bank of England Governor Mark Carney said additional stimulus could be injected into the British economy if needed. ID:nL8N162191
This added to the negative tone for sterling stemming from the resurgence in uncertainty over Britain's membership of the European Union ahead of a June 23 referendum on the issue.
Resources stocks weighed most heavily on European equity indices after the world's largest miner, BHP Billiton, posted its first loss in 16 years and the Ifo measure of German business confidence fell to a three-year low.
"Europe desperately needs its powerhouse economy to fire, and unfortunately the German machine is merely chugging along at best," said Dennis de Jong, managing director at UFX.com.
BHP Billiton announced a $5.67 billion net loss in the six months to the end of December, its first loss in 16 years, and said it would slash its interim dividend by 75 percent. ID:nL3N16159K
Its shares were down 3 percent BLT.L in London, helping to pull the FTSE 100 down 0.5 percent .FTSE . Among the biggest losers was Standard Chartered (L:STAN), whose shares were down 5 percent after the emerging market-exposed bank reported an 84 percent fall in annual profit. ID:nL8N16215D
Germany's DAX was down 0.7 percent .GDAXI , France's CAC 40 was 0.3 percent lower .FCHI and Europe's index of leading 300 shares was down 0.3 percent at 1303 points .FTEU3 .
STERLING EFFORT
Earlier in Asia shares retreated from a seven-week high as the oil price rally that had boosted global equity markets reversed. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.3 percent and Japan's Nikkei .N225 erased morning gains to close down 0.4 percent.
Chinese stocks .SSEC closed 0.9 percent lower, their biggest fall in three weeks, while U.S. futures pointed to a fall of around 0.2 percent on Wall Street ESc1 .
The yuan was fixed 0.17 percent weaker at 6.5273 per dollar CNY=SAEC , its biggest decline since early January.
Oil markets were volatile again on Tuesday, spending most of the day firmly in the red only to eke into positive territory by midsession in Europe. Oil had risen much as 7 percent on Monday - and around 30 percent from their lows a month ago - as speculation about falling U.S. shale output fed the notion that crude prices may be bottoming after their 20-month collapse.
U.S. crude futures CLc1 were last up slightly at $33.50 a barrel and the international benchmark Brent LCOc1 popped up a dollar above $35 a barrel.
In currency markets the British pound GBP=D4 remained vulnerable a day after falling nearly 2 percent, its biggest one-day drop in almost six years, on worries Britain may leave the European Union.
The pound hit a seven-year low of $1.4057 on Monday, after London Mayor Boris Johnson, one of the country's most popular ruling party politicians, announced his support for Britain to leave the EU in June's referendum.
Sterling last stood at $1.4095, down 0.3 percent on the day.
"The whole 'Brexit' discussion is pushing us against what has been a well held level at around $1.40 that sterling has bounced off several times over the last three decades," said Jim Reid, market strategist at Deutsche Bank (DE:DBKGn).
The euro EUR= also fell to $1.10035 on Monday, its lowest in almost three weeks, on fears Brexit could undermine the European project. It was last down 0.3 percent at $1.10 following the Ifo numbers from Germany. ID:nL8N1621E9
Investors' shift towards safer ground on Tuesday pushed the dollar lower against the yen, down almost 1 percent on the day back below 112 yen JPY= .
The dollar's index against a basket of six major currencies .DXY hit a three-week high of 97.60 on Monday but slipped back to 97.28 on Tuesday. This helped lift gold 0.6 percent to $1,215 an ounce XAU= .
The benchmark 10-year Treasury yield was up slightly at 1.78 percent US10YT=RR .
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Shanghai CSI 300 and global effects interactive
https://t.co/YqIYLIbInP Chinese A-shares vs developed and emerging stocks
http://link.reuters.com/rac25w
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Editing by Hugh Lawson)