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World stocks buoyed by Fed, but dollar slides Add to ...

World stock markets rose Wednesday after the U.S. Federal Reserve indicated that interest rates will remain at superlow levels for a while. Meanwhile, the dollar slid to a 10-month low against the yen after the central bank said the currency's decline had been "orderly."

In Europe, the FTSE 100 index of leading British shares was up 28.89 points, or 0.5 per cent, at 5,352.85 while Germany's DAX rose 29.89 points, or 0.5 per cent, to 5,799.20. The CAC-40 in France was 24.87 points, or 0.7 per cent, higher at 3,809.49.

Earlier, Japan's Nikkei 225 stock average advanced 40.06, or 0.4 per cent, to 9,441.64 - its first rise in five days. And China's Shanghai benchmark rebounded from a big retreat the day before, closing up 66.64 points, or 2.1 per cent, at 3,290.17.

Sentiment in the markets was buoyed by further confirmation from the Fed that it plans to keep interest rates at "exceptionally low levels" for an "extended period" - currently the Fed funds rate stands at a range between zero and 0.25 per cent.

The minutes to the last rate-setting meeting, published Tuesday, also showed that a number of the rate-setters thought that it could take five or six years to make up the output lost during the recession and get unemployment back to normal levels.

Though the Fed said its extraordinary policy measures should strengthen economic growth and that low interest rates had the potential to fuel "excessive risk-taking in financial markets," investors latched onto the hope that borrowing costs will remain low for much of next year.

That helped U.S. stocks to pare much of their earlier losses after a downward revision to third-quarter U.S. economic growth stoked fears that valuations in the stock markets were not justified by economic fundamentals.

Wall Street was poised to open modestly higher too - Dow futures were up 35 points, or 0.3 per cent, at 10,440 while the broader Standard & Poor's 500 futures rose 4.8 points, or 0.4 per cent, to 1,017.90.

Attention in the U.S. later will focus on a raft of economic data to be released before traders pack up for the Thanksgiving Holiday. Key items on the agenda include durable goods and new home sales data for October as well as a key gauge of inflation monitored by the Fed.

Gold prices hit record highs at $1,180.00 an ounce in Europe on Wednesday, boosted by a report that India may consider buying more bullion from the International Monetary Fund, and the weaker dollar.

Spot gold was bid at $1,178.30 an ounce at 1022 GMT, against $1,168.90 late in New York on Tuesday.

U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange also hit a record $1,180.40 an ounce and were later up $12.80 to $1,178.60.

Oil rose above $76 a barrel Wednesday on the weakening dollar and as investors awaited a report on U.S. inventories expected to show rising crude stockpiles and lower distillate supplies.

The dollar weakened, increasing the appeal of oil and commodities to some investors, and equities moved higher in Europe supported by an upward revision in the Federal Reserve's U.S. growth forecast in 2010.

U.S. crude for January rose 45 cents to $76.47 a barrel by 0946 GMT, after settling down $1.54 at $76.02 on Tuesday. Brent crude was up 64 cents at $77.10.

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