New York - World stocks slipped on Wednesday as investors were reluctant to make bets ahead of the outcome of a Federal Reserve meeting that could offer further stimulus for the ailing US economy, while oil prices rose a decline in US crude inventories lifted oil prices.
The Fed, ending its two-day policy meeting on Wednesday, is expected to try to push long-term borrowing costs lower by rebalancing its $2.8 trillion bond portfolio to weight it more heavily to longer-term securities in a move dubbed "Operation Twist.
The Fed will issue a statement at about 2:15 p.m New York time.
It is unclear, however, how effective such new measures would be in bolstering U.S. growth, given that the economy is slowing despite the central bank's $600bn bond-buying program that ended in June.
"Operation Twist is unconventional and the best they could offer," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York. "But what will this do in terms of economic growth? I suspect very little.
"I think the Fed will satisfy the market, but since we are in a short-term overbought situation, even if the Fed doesn't disappoint, we might see a short-term pullback."
The MSCI world equity index slipped 0.7% though it was still more than 3.0% above its one-year low set earlier in September.
The FTSEurofirst 300 index of pan-European stocks fell 1.8% while an index of emerging stocks lost 0.7%.
US stocks were mixed.
Oil up, copper at 2011 lowIn the commodities market, London Brent oil gained $1.51 to $112.05 a barrel after government data showed crude stockpiles fell much more than expected last week in the United States. U.S. crude futures rose 52 cents to $87.43 a barrel.
Uncertainty about Europe's debt crisis and the global economy pushed copper prices to new lows for the year.
Three-month copper on the London Metal Exchange fell to $8,295 a tonne, down from Tuesday's close of $8,309. Earlier, the metal used in power and construction slipped to a new low since November 2010 at $8,234.75 a tonne.
Spot gold was last trading slightly lower at around $1,798 an ounce.
Euro reboundsPersistent fears of a possible default on Greek debt weighed on investor sentiment, with Athens and international lenders yet to reach a deal to allow the next tranche of bailout funds to be paid.
The Greek government will make announcements later on Wednesday on the austerity measures it is discussing with its international lenders to save the country from bankruptcy.
But the euro rebounded from lows after breaking above the $1.37 level, though analysts said the currency remained vulnerable. It last traded up 0.1 percent at $1.3721.
"It is now expected that markets will not hear a final decision (on Greece aid) until next week," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto. "As uncertainty continues, there is substantial downside euro risk."
The U.S. dollar traded little changed at 76.37 yen. It had earlier dropped as low as 76.111 yen, close to a record low, ahead of Japan's fiscal half-year end, which tends to see investors unwind their U.S. fixed-income assets and repatriate funds.
Stocks' losses gave a safety bid to U.S. government debt.