* World stocks turn higher after Barclays share issue
* Dollar rises, bonds slip before Fed decision
* Oil creeps above $137 a barrel
By Natsuko Waki
LONDON, June 25 (Reuters) - European stocks jumped on
Wednesday, halting a slide in Asian shares as Barclays announced
an $8.8 billion share issue, boosting other banking shares hours
before a closely watched policy decision by the Federal Reserve.
The dollar edged higher against major currencies, having
fallen the day before on weak U.S. consumer confidence and
housing data, while oil prices rose above $137 a barrel.
Britain's No.3 bank Barclays <BARC.L> said it was raising
capital through a discounted share issue in which Qatar
Investment Authority, the country's sovereign wealth fund, and
Japan's Sumitomo MitsuiBanking <8316.T> will be major investors.
Signs that the world's major banks are clearing up their
troubles from the credit crisis and raising new capital come at
a time when the global economy faces the threat of rising prices
from surging oil and commodity prices.
That has cemented market expectations that the Federal
Reserve would keep its benchmark interest rates on hold at 2.0
percent later on Wednesday, ending a string of cuts since last
year to bolster the slowing economy.
However, analysts doubt the Fed would embark on a series of
aggressive interest rate hikes given still soft signs from the
U.S. economy.
"The spotlight will definitely be on the Fed's statement.
With the U.S. economic situation -- just look at yesterday's
dismal consumer confidence data -- I don't see how they could
signal a tightening bias," said Valerie Plagnol, chief
strategist at CM-CIC Securities in Paris.
The FTSEurofirst 300 index <> rose 0.7 percent while
MSCI main world equity index <.MIWD00000PUS> erased early losses
to stand up 0.1 percent on the day.
The dollar rose 0.1 percent <.DXY> against a basket of six
major currencies. Emerging sovereign spreads <11EMJ> were steady
while emerging stocks <.MSCIEF> rose half a percent.
INFLATION LANGUAGE
The Fed concludes its two-day meeting later on Wednesday,
with the focus on what language the central bank chooses to use
to highlight inflation and growth concerns when it releases the
accompanying statement.
"It seems likely the Fed will choose to adopt language that
suggests more attention to the inflation outlook while
maintaining the language highlighting the risks to growth,"
David Rosenberg, North American economist at Merrill Lynch, said
in a note to clients.
"As a result, the statement is likely to be less a
representation of the evolution of the economy than a reminder
that the Fed is balancing risks to both growth and inflation,
supporting its stance that 2 percent is the appropriate level
for the Fed funds rate."
The September Bund future <FGBLU8> fell a quarter percent as
safe-haven flows diminished in the face of stronger stocks.
U.S. light crude <CLc1> rose 0.2 percent to $137.30 a
barrel, within a few cents of the June record high.
Gold <XAU=> was steady at $888.80 an ounce.
(Additional reporting by Blaise Robinson; Editing by Malcolm
Whittaker)
