Stock markets buoyed before Fed update

LONDON: World stock markets climbed Wednesday, with all eyes on the Federal Reserve's upcoming US interest rate decision and outlook.

Approaching midday in London, the benchmark FTSE 100 index was up 0.6 percent compared with the close on Tuesday, as traders digested a slight improvement to British quarterly growth.

In the eurozone, Frankfurt's DAX 30 won 0.4 percent and the Paris CAC 40 gained 0.8 percent.

The euro slipped back after reaching a near two-year high versus the dollar on Tuesday.

The Federal Reserve is widely expected to leave its key interest rate untouched at Wednesday's policy meeting after raising it twice this year.

Markets instead will be watching for any signals about another possible rise in the benchmark lending rate in 2017, and on when the Fed will begin winding down its multi-trillion-dollar investment holdings -- something that could have a similar effect as a rate hike.

Wall Street stocks closed higher Tuesday, with the S&P 500 and Nasdaq narrowly edging to fresh records following strong earnings from McDonald's and machinery giant Caterpillar.

"With optimism high that we'll see further upbeat updates later in the week from names like Boeing, Facebook and Amazon, US stock markets appear to be riding a renewed wave of exuberance, which European markets may look to try and build on after yesterday's positive session, as we head towards today's... rate decision," said Michael Hewson, chief market analyst at CMC Markets UK.

Asian stock markets mostly rose on Wednesday, led by energy giants on rising commodity prices.

Improving demand and a weakening dollar has helped fuel a jump in copper prices to five-month peaks, while oil has also been boosted by a report pointing to lower US stockpiles.

Both crude contracts jumped three percent Tuesday with traders also cheered by news that global crude producers, meeting in Russia Monday, called for stricter adherence to an agreement to cut output.

Dealers on Wednesday will be hoping for guidance from Fed boss Janet Yellen on its plans for interest rates and when it will start winding in its bond holdings balance sheet, effectively sucking cash out of the market.

While there is no way of knowing what they will do, the "latest chatter suggests the (Fed policymakers) may tip their hat to September as the starting date for reducing the balance sheet", said Stephen Innes, head of Asia-Pacific trading at Oanda.

- Key figures around 1030 GMT -

London - FTSE 100: UP 0.6 percent at 7,480.80 points

Frankfurt - DAX 30: UP 0.4 percent at 12,311

Paris - CAC 40: UP 0.8 percent at 5,203.40

EURO STOXX 50: UP 0.5 percent at 3,141.40

Tokyo - Nikkei 225: UP 0.5 percent at 20,050.16 (close)

Hong Kong - Hang Seng: UP 0.3 percent at 26,941.02 (close)

Shanghai - Composite: UP 0.1 percent at 3,247.67 (close)

New York - DOW: UP 0.5 percent at 21,613.43 (close)

Euro/dollar: DOWN at $1.1641 from $1.1646 at 2050 GMT Tuesday

Pound/dollar: UP at $1.3038 from $1.3026

Dollar/yen: DOWN at 111.80 yen from 111.93 yen

Oil - Brent North Sea: UP 25 cents at $50.45 per barrel

Oil - West Texas Intermediate: UP 36 cents at $48.25