GLOBAL MARKETS-Dollar rises on Fed doubts; stocks fall

                                
 * Fed may buy few hundred bln dollars of Treasuries - WSJ
                                
 * WSJ article adds to doubts about a much bigger QE2
                                
 * Dollar rises to one-mth high, Asia stocks fall 1.8 pct
                                
 * Some Asian central bank chiefs wary; keep options open
                                
 By David Fox
                                
 HONG KONG, Oct 27 (Reuters) - The U.S. dollar rose on
Wednesday on doubts that the Federal Reserve will aggressively
buy bonds to pump more money into the economy, triggering
profit taking in commodities and Asian equities.
                                
 European stock markets followed Asia lower in early trade,
with the FTSEurofirst 300 <.FTEU3> index of leading stocks
sliding 0.7 percent. S&P 500 futures <SPc1> were down 0.7
percent, pointing to a weaker opening on Wall Street.
                                
 The Wall Street Journal said on Wednesday that the Federal
Reserve would probably unveil a programme of U.S. Treasury bond
purchases worth "a few hundred billion dollars", but gave no
source for the report. [ID:nTOE69Q02H]
                                
 Most currency dealers had expected a Fed policy meeting
next week to opt for more quantitative easing -- essentially
printing money to buy assets and pull market rates lower -- but
some believe the dollar already reflects those expectations and
the question of how much easing, and how fast, has kept them
edgy.
                                
 The dollar index against a basket of major currencies
<.DXY>, rose 0.5 percent. The euro was down nearly half a
percent on the day at $1.3798 <EUR=>, while the dollar was up
0.41 percent at 81.73 yen <JPY=>.
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  For a preview of the Fed meeting and possible outcomes,
see                                                
[ID:nN25168493]
                                
  For more on the G20 meeting, click         [ID:nTOE69K01G]
                                
  Will Japan intervene again? click          [ID:nTOE69P01U]
                                
  G20's truce on currencies      http://r.reuters.com/nan99p
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 In a Reuters survey earlier this month, U.S. primary
dealers' projections for the size of the Fed's expected
quantitative easing had ranged from $500 billion to $1.5
trillion. [FED/R]
                                
 "The market has had in mind a figure of $1 trillion or more
and we had been in a situation where that had led to dollar
weakness," said Masafumi Yamamoto, chief FX strategist Japan
for Barclays Capital. [ID:nTOE69Q041]
                                
 Analysts at Bank of America-Merrill Lynch wrote in a client
note that the prevailing market belief was that QE was now
close to being fully priced in and anything short of $500
billion in announced purchases over a six-month horizon could
disappoint and cause interest rates to rise.
                                
 A top concern of policymakers in Asia is that any
additional easing by the Fed will send more speculative "hot
money" into emerging economies, pushing up their currencies to
the point where exports are less competitive and threatening
regional economic growth.
                                
 Singapore's central bank warned on Wednesday of the risk of
a disorderly reverse of such capital inflows if inflation was
not contained. Indian and South Korean officials also expressed
concerns about the impact of the recent flood of inflows.
[ID:nSGC003812]
                                
 The Korean won led a selection of emerging Asian currencies
lower against the dollar, dipping 0.7 percent to 1,128.95 per
dollar by 0630 GMT.
                                
 The MSCI index of Asia Pacific stocks outside Japan fell
1.8 percent <.MIAPJ0000PUS>, on track for the biggest daily
decline since August,  while the MSCI's emerging market stock
benchmark <.MSCIEF> was down 1.1 percentas of 0730 GMT.
                                
 Japan's Nikkei <.N225> ended marginally higher. [.T]
                                
 COMMODITIES SAG AS DOLLAR BOUNCES
                                
 The rebounding dollar has caused some investors to bail out
of commodity stocks, pulling down the MSCI Asia ex-Japan
commodity sector index as raw materials prices slid.
                                
 Hong Kong's benchmark Hang Seng Index <.HSI> was down 1.7
percent, with the China Enterprises Index <.HSCE> of top
locally listed mainland Chinese companies 2.7 percent lower.
                                
 Overnight, the Dow Jones industrial average <.DJI> and the
Standard & Poor's 500 Index <.SPX> were little changed while
the Nasdaq Composite Index <.IXIC> gained 0.3 percent. [.N]
                                
 Spot gold <XAU=> edged down 0.56 percent to $1,331.25 an
ounce, while crude oil <CLc1> fell 0.54 percent to $82.01 per
barrel.
                                
 Copper traded on the London Metal Exchange was down 1
percent to $8,424 a tonne <CMCU3>, essentially giving back the
week's gains before Wednesday.
  (Additional reporting by Wayne Cole in SYDNEY and Manuela
Badawy in NEW YORK and Charlotte Cooper in TOKYO; Editing by
Kim Coghill)
 (david.fox@thomsonreuters.com; +852 28431649; Reuters
Messaging: david.fox.reuters.com@reuters.net)