Global stocks rise, euro gains on central bank hopes
By Caroline Valetkevitch
NEW YORK (Reuters) - World stocks rose and the euro gained on Tuesday amid optimism the world's major central banks will provide more economic stimulus as the euro zone debt crisis worsens.
The U.S. Federal Reserve on Tuesday began a two-day policy-setting meeting, with investors focused on whether it will unveil any more stimulus to support the lackluster recovery.
Analysts expect the Fed to extend its long-term bond-buying through "Operation Twist" by a few months from its planned end later in June. Expectations of further stimulus from the Fed pressured the U.S. dollar.
Investors have been worried about the impact of the euro zone debt crisis on the global economy, particularly as U.S. economic growth appears to be losing momentum.
U.S. stocks ended up sharply, while world stocks, as measured by the MSCI's all-country world equity index .MIWD00000PUS climbed 1.3 percent.
The euro was last up 0.9 percent at $1.2689 after hitting session highs above $1.27.
"People are anticipating some type of response from the Fed tomorrow and are buying or covering shorts in anticipation of that," said Paul Zemsky, head of asset allocation at ING Investment Management in New York.
A Fed statement is due after the meeting ends on Wednesday, usually around 2:15 p.m. EST (1815 GMT). Continued...