* Fed meeting dominates sentiment
* Dollar weakens against major currencies
* Euro zone bond sales go well
* World stocks eke out gains, Wall Street looks to open flat
By Jeremy Gaunt, European Investment Correspondent
LONDON, Sept 21 (Reuters) - World stocks ticked upwards and
the dollar fell broadly on Tuesday as investors braced for a
Federal Reserve meeting that may discuss whether the fragile
U.S. economy needs a fresh infusion of cash.
Wall Street looked set to open flat.
What had been increasing pressure on peripheral euro zone
debt eased, meanwhile, with an Irish bond auction going smoothly
and a successful sale of Greek T-bills..
The focus of the day was the Fed's regular meeting. There
was little expectation of any firm moves from the policymakers,
but, as ever, the wording of their statement would be key.
At issue is how close the stumbling U.S. economy is to
requiring the return of quantitative easing -- effectively
printing money to buy mortgage bonds and securities.
"The statement might be quite dovish, which could intensify
speculation of more QE later in the year," said Niels
Christensen, currency strategist at Nordea in Copenhagen.
One of the "victims" of the mood was the dollar, which fell
around 0.4 percent against a basket of major currencies <.DXY>.
"The consensus is that the Fed won't announce any QE today,
but no one wants to be long dollars going into the meeting,"
Christensen said.
The euro was up half a percent at $1.3130 <EUR=>, also
supported by solid demand at euro zone debt sales in some of the
troubled peripheral economies, some of which have been looking
to be heading into crisis again.
Greece sold 390 million euros ($512 million) of 3-month
T-bills at an average yield of 3.98 percent, down from 4.05
percent in a previous July 20 sale. Overseas investors bought 72
percent, a sign of relative confidence.
Ireland sold 1.5 billion euros in an auction of 2014 and
2018 bonds, at the top of its target range. Yields -- 4.767
percent and 6.023 percent respectively -- were well below those
seen for the bonds on secondary markets on Monday.
"Very strong auctions from Greece and Ireland. This along
with the spread tightening we've seen this morning and the
strong bid-cover ratios means this funding round for Ireland,
and Greece, has been passed convincingly," said Peter Chatwell,
rate strategist at Credit Agricole.
STOCKS TICKING OVER
The Fed meeting was keeping stock investors tentative.
World stocks as measured by MSCI <.MIWD00000PUS> were up 0.1
percent while the Thomson Reuters equivalent index <.TRXFLDGLPU>
was closer to 0.2 percent.
The pan-European FTSEurofirst 300 <> gained 0.2
percent.
"Investors are waiting on the sidelines. Yesterday the
market went up in anticipation that the Fed can do something
about the economy, but I think people are ignoring the
macroeconomic condition," said Koen De Leus, economist at KBC
Securities in Brussels.
U.S. economic data on tap for Tuesday includes housing
starts for August.
Earlier, Japan's Nikkei <> hit a seven-week intraday
high of 9,704.25 but ended down 0.3 percent or 23.98 points at
9,602.11.
(Additional reporting by Jessica Mortimer, William James and
Atul Prakash)
