World Stocks Bounce After Fed Boosts Economic View

World stock markets shot higher Thursday after the U.S. Federal Reserve said the world's largest economy appeared to be "leveling out" from its worst recession in decades.

Almost every major market in Asia was green after tumbling the day before ahead of the U.S. central bank's announcement, with Europe following the advance in early trade. Oil prices were steady near $71 a barrel and the dollar gained against the yen.

Japan's Nikkei 225 stock average rose 82.19 points, or 0.8 percent, to 10,517.19, while Hong Kong's Hang Seng jumped 426.06, or 2.1 percent, or 20,861.30. India's Sensex was up 2.5 percent in afternoon trading.

"We have more and more confirmation the U.S. recession is ending and investors are currently buying into this," said John Mar, co-head of sales trading, Daiwa Securities SMBC Co. in Hong Kong.

At the same time, Mar said there's some fear that the rally could hit a wall and reverse in the coming weeks. Flows of money into investment funds were getting choppy after months of solid growth and traders were increasingly placing bets the Standard & Poor's 500 index, up nearly 50 percent since March, will retreat next month, buying so-called put options.

Markets in Taiwan, Australia and Singapore gained around 2 percent apiece. Shanghai's index righted itself 0.9 percent to 3,140.56 following a nearly 5 percent tumble the previous session. Korea's Kospi closed little changed.

In Europe, benchmarks in Britain, Germany and France rose nearly 1 percent in early trade. Wall Street was poised for a stronger opening Thursday with Dow futures up 74, or 0.8 percent, at 9,393.

Optimism about the American economy took hold after the Fed, wrapping up its two-day policy meeting, issued a rosier assessment of the economy and said it would keep to its key interest rate near zero. In another sign of confidence in a U.S. revival, the central bank said it would dial back one of its main emergency lifelines to the economy — a program to buy government securities as a way to keep rates on mortgages and other consumer debt lower.