(Corrects Japanese stocks milestone in lead to 1988, not 1998)
* MSCI world index drops off latest high, Wall Street to drop China Q3 GDP growth slows slightly to 6.8 pct vs 6.9 pct in Q2
* Dollar sags as Treasury yields slip back
* NZ dollar slumps after nationalists help form new govt
* Brent crude flags after climbing to 3-week high
* China cenbank head warns of 'Minsky moment'
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Grahpic: Catalonia independence push tmsnrt.rs/2kGGUm3
By Marc Jones
LONDON, Oct 19 (Reuters) - World stocks set a fresh record high before stalling in Europe on Thursday, as the longest winning streak for Japanese stocks since 1988 and the first close above 23,000 for Wall Street's Dow index helped to offset nerves about Spain.
Traders were marking 30 years to the day since the 1987 Black Monday stock market crash but there couldn't have been a greater contrast as equity markets continued to clock up milestone after milestone.
The Nikkei enjoyed its 13th straight daily rise, helping the MSCI index of global stock markets - now up 17.6 percent for the year - add to its long list of 2017 record highs.
It wasn't all one-way traffic, though.
European shares took their biggest tumble in almost two months after a batch of third-quarter results brought some disappointments, notably from Anglo-Dutch consumer goods titan Unilever, French advertising group Publicis and Germany's Kion.
They then took another lurch lower as oil hit the skids and signals emerged from Spain that Madrid was gearing up to invoke a never-before-used clause to re-impose central rule over the restive region of Catalonia.
That was enough to pull the euro briefly into negative territory though it later recovered to hit a 1-week high on the dollar.
Spanish stocks dropped as much as 1 percent as volatility gauges woke from their recent slumber while Madrid's government bonds also sold off, but like the euro, they rebounded again.
"Everyone is watching this with great interest but it just looks like a standoff," said Saxo Bank FX strategist John Hardy, saying the situation was something of a 'catch-22' for Catalonia.
A declaration of independence would see it lose its prized autonomy, while calling a regional election could mobilise Catalan voters who would prefer to stay part of Spain.
"But the market is not expressing any real fear over this and I think that is justified," Hardy added.
The other big currency market move came from the New Zealand dollar. It was sent skidding to its lowest since May after the left-leaning Labour Party won the support of the minor nationalist New Zealand First party to form a ruling coalition.
This ended weeks of political guessing games but fanned concerns that the Labour Party's hardline policies on immigration and foreign ownership could hurt investor sentiment.
The Kiwi slid as much as 1.9 percent to $0.7017, which as well as the 4-1/2 month low was also the biggest percentage decline since August 2015.
Wall Street was expected to restart around 0.5 percent in red. The Dow Jones closed above 23,000 for the first time on Wednesday, driven by a jump in IBM after it hinted at a return to revenue growth.
But the mood was dimmed on Thursday by a 1.7 percent pre-market slide in Apple on concerns about demand for its new iPhone models and as eBay tumbled 6.5 percent after it warned current-quarter profit could miss estimates.
Among the other headlines overnight, China's economic growth cooled slightly to 6.8 percent in the third quarter from a year earlier, from the second quarter's 6.9 percent.
A modest loss of momentum had been expected as the government reins in the heated property market and cracks down on riskier lending.
Other data showed that China's industrial output rose a stronger-than-expected 6.6 percent in September, while retail sales also outperformed.
But property sales also fell for the first time in over two years. People's Bank of China Governor Zhou Xiaochuan then spoke of the risks of a "Minsky moment" in the economy, referring to a sudden collapse in asset prices sparked by debt or currency pressures.
The Chinese yuan and stocks eased, with Shanghai falling 0.4 percent.
"The GDP reading could weigh negatively on both mainland stocks and currency markets as traders may position for further weakness into year-end, suspecting financial curbs will continue to have a negative impact on growth in China," said Stephen Innes, head of Asia-Pacific trading at OANDA in Singapore.
The dollar index against a basket of six major currencies weakened to 93.229.
The index ended a four-session winning run overnight on lacklustre U.S. data and was struggling to regain traction as 10-year Treasury yields dipped 2 basis points as investors returned to the safety of bonds.
The dollar was down 0.4 percent at 112.470 yen after climbing 0.6 percent overnight. The euro shock off its Spanish wobble to nudge up 0.3 percent to $1.1827, while Britain's pound slide again as Brexit-related uncertainty and weaker data weighed.
The term of current Fed Chair Janet Yellen's expires in February and investors are keen to see whom U.S. President Donald Trump will pick as her replacement. The White House said Trump would announce his decision in the "coming days".
Commodities were also choppy with Brent and U.S. crude futures both down 1.3 percent at $57.37 and $51.33 a barrel respectively.
Brent had risen to a three-week high of $58.54 a barrel on Wednesday on worries about tensions in Iraq and Iran, but lost steam after a surprising drop in U.S. refining rates and an unexpected build in fuel stocks signalled slower demand in the world's top oil consumer. (Reporting by Marc Jones; Editing by Toby Chopra)