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* Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates http://tmsnrt.rs/2egbfVh
By Ritvik Carvalho
LONDON, March 16 (Reuters) - World stocks rose on Tuesday,
as investors anticipated the U.S. Federal Reserve and other
central banks meeting this week will keep policies accommodative
to help drive a post-pandemic global economic recovery.
European shares extended a rally that began on Wall Street
on Monday and continued into Asia, with the pan-region STOXX 600
index up 0.5%. On Monday, the index touched
its highest level in more than a year before ending flat.
Britain's FTSE 100 index rose 0.7%, Germany's DAX
0.6%, France's CAC 40 0.2% and Italy's FTSE MIB index
0.6%.
E-mini futures for the S&P 500 hit a record high
before trading flat on the day.
MSCI's All Country World Index, which tracks stocks across
49 countries, rose 0.2% to its highest levels since Feb 25.
An index of Asia-Pacific share markets excluding Japan
gained 0.65%, led by a 0.8% jump in Australia's
benchmark S&P/ASX 200 index.
Japan's Nikkei 225 gained 0.5% to just below the
30,000 mark. The broader Topix added 0.65%.
China's blue-chip CSI 300 index climbed 0.87% and
Hong Kong's Hang Seng gained 0.67%.
"The stock markets have kept their spirits up ahead of
tomorrow's important Fed announcement," said Karl Steiner, chief
quantitative strategist at SEB.
On Monday, the S&P 500 and Dow Jones Industrial Average both
soared on gains in travel stocks as mass vaccinations in the
United States and congressional approval of a $1.9 trillion aid
bill fueled investor optimism.
Longer-term U.S. Treasury yields slipped further on
Tuesday, as the market looked ahead to government debt auctions
and the Fed's two-day policy meeting, which will conclude on
Wednesday.
The benchmark 10-year yield, which reached a
more than one-year high of 1.642% last week, was back at 1.125%.
The earlier surge in yields stemmed from investors
speculating that rising inflation expectations could prompt the
Federal Open Market Committee to signal it will start raising
rates sooner than expected.
"We think the FOMC will have a hard time expressing concern
about asset markets with the S&P at an all-time high on 12
March, despite 10Y U.S. Treasury yields at post-February 2020
highs," said analysts Steve Englander and John Davies at
Standard Chartered.
"Focus has been on the FOMC ‘dot plot’ in recent days, but
if the FOMC and Fed Chair (Jerome) Powell do not push back
against current yield levels, investors are likely to take
yields higher as better data arrives."
Fed policymakers are expected to forecast that the U.S.
economy will grow in 2021 by the fastest rate in decades, as it
recovers from a coronavirus-stricken 2020.
The Bank of England also meets this week on Thursday and the
Bank of Japan wraps up a two-day meeting on Friday.
On Wall Street, the Dow Jones Industrial Average rose
174.82 points, or 0.53%, to 32,953.46, the S&P 500 gained
25.6 points, or 0.65%, to 3,968.94 and the Nasdaq Composite
remained unchanged.
Airline shares rose as the companies pointed to
concrete signs of an industry recovery as vaccine rollouts help
spur leisure bookings.
The outlook for post-pandemic recoveries continued to
diverge between the U.S. and Europe.
President Joe Biden's order to make vaccination available to
all adults by May 1 contrasted with stuttering rollouts in
Germany, France and elsewhere, where use of the AstraZeneca
vaccine has been suspended amid concern over possible
side effects.
However, Kyle Rodda, an analyst at IG Markets, said the
prospect of a slower economic recovery in Europe didn't appear
to be a major handicap for investors.
"It doesn't seem to be the view that this is a real risk,"
he said. "Investors are wary, but not worried."
In currencies, the U.S. dollar held small gains from
overnight, with caution evident ahead of the central bank
meetings.
The dollar was largely flat at 109.19 yen, after
rising as high as 109.365 on Monday for the first time since
June.
The euro was little changed at $1.1930, holding for
an eighth session below the $1.20 level.
Bitcoin halted its slide from a record high of
$61,781.83 reached on Saturday, last trading 1% higher on the
day around $56,250.
U.S. West Texas Intermediate crude for April changed
hands at $64.74 a barrel, down 1%. Brent crude futures
for May stood at $68.22 a barrel, losing 1%.
(Reporting by Ritvik Carvalho; additional reporting by Kevin
Buckland and Kane Wu in Tokyo; editing by Larry King)
