World stocks rise ahead

World stocks rise ahead of Federal Reserve meeting
World stock markets rise as traders turn their attention to Federal Reserve meeting


By Pamela Sampson, AP Business Writer | Associated Press

BANGKOK (AP) -- World stock markets rose modestly Tuesday following sharp losses the day before as investors looked to the Federal Reserve for new steps to help the U.S. economy.
News about Europe's debt crisis continues to overshadow markets with stocks swinging between positive and negative territory from one day to the next.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said investors are looking to a meeting of U.S. Federal Reserve policymakers on Tuesday and Wednesday to discuss the economy and monetary policy.
Traders are hoping there might be some show of support for a third round of bond purchases, dubbed quantitative easing III or QE3, to support the U.S. economy.
The Fed has already carried out two rounds of bond-buying to drive down long-term interest rates. But the Fed gave no hint of more bond buying at its meeting in March, and Yip said it was "very hard to tell" which way the Fed may be leaning this time.
In early European trading, Britain's FTSE 100 rose 0.5 percent to 5,696.07. Germany's DAX added 0.6 percent to 6,560.93 after losing 3.4 percent the day before. France's CAC-40 climbed 0.7 percent to 3,121.39, having fallen 2.8 percent Monday, erasing all the gains for the year.
Wall Street was headed for a higher open, with Dow Jones industrial futures gaining 0.2 percent to 12,902. S&P 500 futures were up 0.3 percent to 1,266.70.
Strong headwinds have been emanating in recent days from Europe, where a festering, two-year debt crisis has begun jolting the region's political landscape.
The Dutch government collapsed Monday, while a Socialist who wants to put France's austerity plans in reserve looks set to unseat conservative President Nicolas Sarkozy in elections next month.
Meanwhile, a new report showed that European government debt is piling up despite severe budget cuts. A separate survey of manufacturing and services in countries that use the euro unexpectedly fell in April to a five-month low of 47.4, down from 49.1 in March. A level below 50 means contraction.
Asian stocks slumped early Tuesday amid all the distraction from Europe, but some key benchmarks found their footing by close.
Japan's Nikkei 225 index closed down 0.8 percent at 9,468.04 and South Korea's Kospi lost 0.5 percent to 1,963.42.
Australia's S&P/ASX 200 added 0.2 percent to 4,360.40, with lower-than-expected inflation encouraging traders to wade into stocks. Hong Kong's Hang Seng rose 0.3 percent at 20,677.16 and benchmarks in Singapore, Taiwan, Thailand and Indonesia also finished higher.
In mainland China, the benchmark Shanghai Composite Index was virtually unchanged at 2,388.83 while the smaller Shenzhen Composite Index lost 0.9 percent to 936.51.
Among individual stocks, All Nippon Airways rose 4.1 percent after the company revised its operating revenues higher for the year ending March 31, 2012 due to strong demand from tourism, despite sluggish business demand on domestic routes.
Shares of Alibaba were 0.2 percent higher in Hong Kong after the company said independent financial advisers recommended that shareholders vote in favor of a privatization deal for the Chinese e-commerce company.
Benchmark oil for June delivery was up 16 cents to $103.28 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 77 cents to settle at $103.11 in New York on Monday.
In currencies, the euro rose to $1.3166 from $1.3144 late Monday in New York. The dollar was nearly unchanged at 81.14 yen.