Global Markets: Stocks up on Asia push, muted Wall Street eyes Fed minutes

By Rodrigo Campos

NEW YORK (Reuters) - World stocks rose on Wednesday, hitting a four-month high on hopes for progress in trade talks between the United States and China, and a supportive backdrop from major central banks also helped push risk assets higher.

Sterling shot up in mid-morning New York trading to turn positive on the day versus the U.S. dollar after Bloomberg News reported the Spanish foreign minister said a Brexit accord was being "hammered out."

Stocks started with a rally in Asia that pushed the MSCI world equity index to its highest since October after U.S. President Donald Trump said negotiations with China were going well and suggested he was open to extending the deadline to complete them beyond March 1.

Many had feared U.S. tariffs on $200 billion worth of Chinese imports would rise to 25 percent from 10 percent if no trade deal was reached by then.

European stock indexes also strengthened, with a regional index at a four-month high. Wall Street stocks were little changed, with the S&P 500 hovering near its 2019 high.

Traders awaited the release on Wednesday of minutes from the Federal Reserve's January meeting, at which policymakers effectively signaled no further rate hikes and possible tweaks to balance sheet normalization.

"Investors expect more details regarding the shrinking of the Fed's balance sheet and obviously more clues on the Fed pause," Peter Cardillo, chief market economist at Spartan Capital Securities, wrote in a client note.

The Dow Jones Industrial Average rose 19.35 points, or 0.07 percent, to 25,910.67, the S&P 500 gained 2.95 points, or 0.11 percent, to 2,782.71 and the Nasdaq Composite added 18.07 points, or 0.24 percent, to 7,504.83.

The pan-European STOXX 600 index rose 0.70 percent and MSCI's gauge of stocks across the globe gained 0.49 percent.

Emerging market stocks rose 1.48 percent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 1.29 percent higher, while Japan's Nikkei rose 0.60 percent. Hong Kong's Hang Seng gained 1 percent to close at the highest level since August.

While hopes for a trade deal between the world's two largest economies are seen as the primary driver for world stocks, dovish central bank messages from the United States to Asia and the ECB are also playing a part.

On currency markets, the dollar dipped against a basket of major currencies after the Brexit-linked rise in sterling also pulled the euro higher.

The dollar index fell 0.16 percent, with the euro up 0.19 percent to $1.1361 while Sterling was last trading at $1.3073, up 0.08 percent on the day.

The Japanese yen weakened 0.06 percent at 110.71 per dollar, after Japan recorded its biggest annual drop in exports in January for more than two years, and on recent dovish Bank of Japan signals.

The offshore yuan rose 0.5 percent against the dollar to a three-week high of 6.7131.

U.S. oil prices rose above $57 per barrel for the first time in three months supported by OPEC-led supply cuts and U.S. sanctions on Iran and Venezuela, but soaring U.S. production and expectations of an economic slowdown kept the market wobbly.

U.S. crude rose 1.63 percent to $57.37 per barrel and Brent was last at $67.14, up 1.04 percent on the day.

Benchmark 10-year notes last fell 2/32 in price to yield 2.65 percent, from 2.645 percent late on Tuesday.

The 30-year bond last fell 11/32 in price to yield 3.0055 percent, from 2.988 percent late on Tuesday.

(Additionmal reporting by Kate Duguid and Richard Leong in New York and Shreyashi Sanyal in Bengaluru; Editing by David Gregorio)