Stocks rebound as Evergrande jitters ease; dollar slips ahead of Fed



* China Evergrande settles interest payments on bond

* MSCI global stock index regains ground for 2nd day

* Wall Street, European markets post solid gains

* Oil prices gain, US 10-yr yield little changed

* Fed policy decision later on Weds in focus

By Lewis Krauskopf and Tom Wilson

NEW YORK/LONDON, Sept 22 (Reuters) - U.S. and European stocks churned higher on Wednesday as market jitters around property developer China Evergrande eased, while the dollar index edged lower ahead of a U.S. Federal Reserve meeting.

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.62%, bouncing back for a second day after it logged its biggest one-day percentage drop in two months on Monday.

Wall Street's main indexes moved higher in early Wednesday trade following solid gains for markets in Europe.

China Evergrande agreed to settle interest payments on a domestic bond, while the Chinese central bank injected cash into the banking system, soothing investors' fears of imminent contagion from the debt-laden property developer that had pressured equities and other riskier assets at the start of the week.

"Right or wrong, people I think are starting to show signs that they think maybe this pullback has reached its worst point," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas. "It wasn't entirely the Evergrande situation, but it seems like that was one of the biggest pieces of it."

On Wall Street, the Dow Jones Industrial Average .DJI rose 361.36 points, or 1.07%, to 34,281.2, the S&P 500 .SPX gained 37.02 points, or 0.85%, to 4,391.21 and the Nasdaq Composite .IXIC added 88.66 points, or 0.6%, to 14,835.06.

The pan-European STOXX 600 index .STOXX rose 0.93%, with bank stocks .SX7P surging.

With a number of central banks around the world meeting this week, the Bank of Japan (BOJ) offered a bleaker view on exports and output as Asian factory shutdowns caused supply bottlenecks, but maintained its optimism that robust global growth would keep the economic recovery on track. BOJ Governor Haruhiko Kuroda also brushed aside fears that the debt problems of Evergrande could disrupt the global financial system.

Investors were closely watching the Fed, with the U.S. central bank expected to clear the way on Wednesday for reductions to its monthly asset purchases later this year.

The dollar index =USD fell 0.102%, with the euro EUR= up 0.16% to $1.1742. The Japanese yen weakened 0.32% versus the greenback at 109.56 per dollar.

Benchmark U.S. 10-year notes US10YT=RR last rose 1/32 in price to yield 1.3209%, from 1.324% late on Tuesday.

Oil prices climbed after industry data showed U.S. crude stocks fell more than expected last week after two hurricanes, highlighting tight supply as demand improves.

U.S. crude CLc1 rose 1.93% to $71.85 per barrel and Brent LCOc1 was at $75.77, up 1.9% on the day.

Spot gold XAU= dropped 0.1% to $1,773.31 an ounce, after three sessions of gains.



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Reporting by Tom Wilson in London; additional reporting by Tom
Westbrook in Singapore and Anushka Trivedi in Bengaluru; editing
by Sam Holmes, Hugh Lawson and Alex Richardson



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