by Ben Perry
LONDON, Aug 10 (AFP) - Global stock markets recovered some lost ground on Tuesday as investors temporarily shrugged off the impact of record high oil prices to focus on a looming US interest rate decision, dealers said.
New York's light, sweet crude for September delivery shot above 45 dollars for the first time on record Tuesday, hitting 45.04 dollars per barrel in early deals.
It came as concerns about supply disruptions lingered in the wake of Iraq's move on Monday to halt the pumping of crude from its southern oil fields.
Wall Street meanwhile opened stronger Tuesday, just hours before the US Federal Open Market Committee (FOMC) was expected to hike US interest rates by a quarter point to 1.5 percent.
"It's not really the (interest rate) decision that is interesting investors so much as the (committee's) accompanying statement," Jeremy Batstone of Charles Stanley stockbrokers said in London.
Financial markets had expected the Federal Reserve to raise its key US federal funds rate to 2.0 percent by year-end, but that prospect had been damaged by weak US jobs numbers published last week.
"Although we expect the statement to acknowledge the recent weakness in the labour market we expect the FOMC to continue to express optimism over the prospect that economic activity will accelerate in the second half of the year," Bank of Tokyo-Mitsubishi analyst Derek Halpenny said.
In early US trading Tuesday, the Dow Jones industrials average of 30 top stocks rose 0.79 percent to 9,892.60 points, the broader Standard and Poor's 500 index climbed 0.77 percent to 1,073.42 points and technology-laden Nasdaq index won 1.10 percent to 1,794.21.
European stock markets also rallied.
The British FTSE 100 index closed 0.85 percent higher at 4,350.90 points, the German DAX 30 climbed 0.82 percent to 3,720.64 points and the French CAC 40 jumped 1.02 percent to 3,533.06, a day after falling to the lowest level since December 2003.
In earlier Asian trading, Tokyo's benchmark Nikkei-225 index closed 0.41 percent higher at 10,953.55 points, although Hong Kong's key Hang Seng Index ended 0.48 percent lower at 12,408.04.
The dollar meanwhile fell strongly against the euro in late European trading.
Analysts said the fall was because a group linked to Al-Qaeda had claimed responsibility for fatal bomb blasts in Istanbul Tuesday and warned of more such strikes in Europe.
The euro rose to 1.2306 dollars from 1.2269 late on Monday in New York.
The dollar traded at 110.83 yen against 110.67 on Monday.
"The Abu Hafs (al-Masri) Brigades have carried out the first of a series of operations that will be launched in the face of European states... and the upcoming attacks will be more violent," the group said in a statement posted on an Islamist website.
Attacks targeting tourist hotels and a gas complex killed two people and wounded another 11 in Istanbul on Tuesday.