Sawt Falasteen - Global stocks rise on Fed optimism, China zero-Covid reports

The Fed is widely expected Wednesday to announce a fourth straight 75-basis-point rate hike as it tries to rein in runaway prices, leading to worries it will tip the world's top economy into recession, sending stocks tumbling.

But recent reports have suggested officials are looking to dial down the pace of increases, which has sparked a rally in risk assets over the past week -- helped by signs other central banks are also trying to take a step back.

"While a 75 basis point hike looks locked in tomorrow, the messaging is what investors are interested in," said Craig Erlam, senior market analyst at OANDA.

The main indices in London and Paris were both up 1.6 percent in afternoon trading, with Frankfurt gaining 1.3 percent.

The Dow Jones gained 0.7 percent after opening in New York.

- Waiting game -

"The waiting game for the Fed is still on, with investors largely in the dark until the US central bank illuminates the path ahead for interest rate rises tomorrow," said Hargreaves Lansdown analyst Susannah Streeter.

"In the interim they have been feeling their way to a more optimistic attitude, hopeful that economic indicators hinting that inflationary pressures are beginning to subside could lead to a softening in monetary policy."

In Asia, Hong Kong led the rally following unconfirmed posts on Chinese social media saying officials were putting together a committee to discuss how to move the country away from its economically damaging zero-Covid policy.

Shares jumped more than five percent after the appearance of the unverified document, which ramped up hopes that the world's number two economy could begin opening up again in the new year and ease the strict containment measures that have hammered productivity and markets.

However, neither Chinese state media nor government officials have suggested that the meeting actually took place, or that such a committee was established, raising questions about the veracity of the statement.

Nonetheless, Shanghai climbed more than two percent, while the yuan also rallied after recently falling to record lows against the dollar.

Sydney was also well up after the Australian central bank lifted rates by 0.25 percentage points to a near-decade high but brushed off calls for a bigger raise.

- Big earnings season -

Meanwhile positive results from multinational firms also helped lift equities.

Shares increased in London-listed oil giant BP after it reported that third-quarter profit had more than doubled on high commodity prices, to $8.2 billion.

It is the latest energy group to report bumper earnings in recent weeks after Chevron, Shell and TotalEnergies.

Also reporting Tuesday was US drugmaker Pfizer, which recorded an 83-percent surge in Covid-19 vaccine revenues in the United States in the most recent quarter.

Shares in Pfizer rose more than two percent.

Japanese conglomerate Sony raised its annual net profit and sales forecasts Tuesday, saying the weak yen had boosted sectors such as its massive global entertainment business, including PlayStation games.

And shares in British grocery delivery platform Ocado soared more than 35 percent after it announced a tie-up with South Korean conglomerate Lotte Shopping.

- Key figures around 1330 GMT -

London - FTSE 100: UP 1.6 percent at 7,204.71 points

Frankfurt - DAX: UP 1.3 percent at 13,431.58

Paris - CAC 40: UP 1.6 percent at 6,368.12

EURO STOXX 50: UP 1.6 percent at 3,674.66

New York - Dow: UP 0.7 percent at 32,952.24

Tokyo - Nikkei 225: UP 0.3 percent at 27,678.92 (close)

Hong Kong - Hang Seng Index: UP 5.2 percent at 15,455.27 (close)

Shanghai - Composite: UP 2.6 percent at 2,969.20 (close)

Euro/dollar: UP at $0.9938 from $0.9885 on Monday

Pound/dollar: UP at $1.1549 from $1.1465

Dollar/yen: DOWN at 147.25 yen from 148.72 yen

Euro/pound: DOWN at 86.05 pence from 86.20 pence

West Texas Intermediate: UP 3.0 percent at $89.15 per barrel

Brent North Sea crude: UP 2.7 percent at $95.32 per barrel

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K.AbuDahab--SF-PST