* MSCI ex-Japan up 0.9 percent, HK leads gains
* Dollar on backfoot as Fed looks set to ease policy
* U.S. election outcome seen positive for stocks
By Sugita Katyal
SINGAPORE, Nov 3 (Reuters) - Asian stocks rose on Wednesday
following overnight gains on Wall Street while the dollar was
under pressure ahead of a Federal Reserve meeting that is
expected to provide more stimulus to spur a flagging recovery.
The MSCI index of Asia Pacific stocks outside of Japan
<.MIAPJ0000PUS> was up 0.34 percent helped by gains in
materials and energy in line with Wall Street after a swing
towards the Republicans in U.S. elections lifted investor
sentiment.
Hong Kong's Hang Seng Index <> leapt to its highest in
28 months, rising 1.9 percent spurred by gains in banks and oil
counters.
South Korea's KOSPI <> gained 1 percent on foreign
buying with banks and insurers up amid strengthening
expectations for an interest rate hike after the Australia
central bank's surprise decision to increase rates.
Japan's financial markets are closed because of a public
holiday.
The dollar stayed on the backfoot in Asia with the euro
holding above $1.4000 <EUR=> and the Aussie <AUD=> just off
parity ahead of the Fed meeting.
Due at around 1815 GMT, the Fed is expected to announce
plans to buy hundreds of billions of dollars in U.S. government
debt in order to foster a stronger economic recovery.
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For a preview on the Fed meeting []
For a PDF special report: http://link.reuters.com/pyb23q
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Markets are generally priced for the Fed to initially
commit to buying at least $500 billion in Treasuries over five
months, although much uncertainty surrounds the scope and pace
of bond purchases.
"I think they'll take the approach that central banks
usually take for interest rates, which is to make a small
change now and reconsider at the next meeting," said Joseph
Capurso, currency strategist at Commonwealth Bank in Sydney.
"The market is going to be surprised and the U.S. dollar is
going to have a strong across-the-board rally. The market has a
lot priced in now and that's keeping the dollar weak."
Markets were also keeping an eye on the results of U.S.
mid-term elections on Tuesday. Television networks projected
the Republicans would seize control of the House of
Representatives although the Democrats were likely to maintain
the Senate.
A divided Congress is typically seen as bullish for stocks
as it makes passing new laws harder and lessens uncertainty for
business.
Some analysts said a Republican victory could also be
positive for the U.S. currency on market hopes for increased
fiscal austerity and less government regulation.
Gold inched down despite the weaker dollar as investors
stayed on the sidelines on the last day of the Federal
Reserve's meeting.
Spot gold <XAU=> eased 55 cents to $1,356.45 an ounce, off
a two-week high at $1,365.49 hit on Monday. Gold struck a
record around $1,387 last month.
Oil rose to a six-month high above $84 for a second
straight session after an industry report showed declines in
U.S. inventories across fuel categories, a sign chronic
oversupply is subsiding at the world's top user.
U.S. crude for December <CLc1> gained 42 cents to $84.32 at
0050 GMT, after touching $84.50 earlier, the highest intraday
price since May 4. ICE Brent <LCOc1> rose 32 cents to $85.73.
(Additional reporting by Ian Chua in SYDNEY; editing by
Kazunori Takada)
