* Better-than-expected BP earnings lift European stocks
* Fed, BOJ meetings this week keep many investors sidelined
* Weaker dollar helps lift oil
* Sterling gains on lower Brexit chances
* U.S. share seen opening modestly higher
By Jemima Kelly
LONDON, April 26 (Reuters) - World stocks climbed for the
first time in four days on Tuesday and a weaker dollar helped
oil prices gain as investors fine-tuned their expectations for
monetary policy meetings in the United States and Japan.
European shares also benefited from a less-bad-than-expected
80 percent first quarter profit fall and an unchanged dividend
from BP BP.L , as well as encouraging results from pulp and
paper maker UPM UPM1V.HE
Wall Street looked set to open slightly higher, according to
index futures ESc1 1YMc1 SPc1 .
With the quarterly earnings season in full swing, investors
were awaiting an update from the world's biggest company, Apple
AAPL.O .
The pan-European FTSEurofirst 300 .FTEU3 stock index and
Britain's FTSE 100 both rose 0.3 percent .FTSE . .EU
Those gains helped the MSCI world equity index
.MIWD00000PUS , which tracks shares in 45 countries, edge up
after three successive days of losses, taking it back towards an
almost-five-month high touched last week.
"European equity markets are trading moderately higher on
positive corporate earnings surprises from several companies,"
said City of London Markets trader Markus Huber.
Ahead of the two-day Federal Reserve meeting starting on
Tuesday, Huber said "many traders are at least temporarily
moving their overall exposure to more neutral from previous
negative, consequently closing some of their short positions."
Markets see no chance of a U.S. interest rate increase and
are pricing in about a one-in-five chance of a move at the next
meeting on June 14-15. A surprise drop in new U.S. home sales
data for March on Monday added to evidence of anaemic U.S.
economic growth.
Nevertheless, Fed officials have repeatedly said a hike in
June is on the cards.
"Even dovish policy makers such as (Boston Fed President
Eric) Rosengren are saying market expectations are too low,"
said Nomura Securities fixed income strategist Tomoaki Shishido,
in Tokyo.
"So the Fed may try to urge markets to price in higher
rates. On balance, we are more likely to have a hawkish surprise
than a dovish surprise," he added.
The 10-year U.S. Treasuries yield US10YT=RR stood at 1.909
percent, easing from a four-week high of 1.914 percent on
Monday.
DOLLAR DOWN
Asian stocks reversed earlier falls. MSCI's broadest index
of Asia-Pacific shares outside Japan .MIAPJ0000PUS edged up
0.1 percent and Japan's Nikkei .N225 closed down 0.5 percent.
The yen, which tends to have an inverse correlation with
Japanese stocks, climbed for a second day, with the dollar
falling a third of a percent to 110.80 yen JPY= , as prospects
of more monetary stimulus this week from the Bank of Japan,
which begins a two-day meeting on Wednesday, remained unclear.
Late last week, the yen tumbled to three-week lows on
speculation that the BOJ would introduce more easing measures,
but analysts said those expecting aggressive monetary loosening
may be disappointed.
Sterling strengthened to a 10-week high against the dollar
GBP=D4 , building on Monday's gains as investors bet more
heavily that Britons would vote to stay in the European Union at
a referendum in June, following an intervention from U.S.
President Barack Obama on the side of the "In" campaign. GBP/
"It looks as if there has been a change of sentiment," said
Esther Reichelt, an FX strategist with Commerzbank (DE:CBKG) in Frankfurt.
"The options market in general is pricing in less chance of a
big move around the Brexit vote and the market seems less
worried it will happen."
Against the euro, too, the dollar edged down EUR= , leaving
it 0.3 percent lower on the day against a basket of major
currencies .DXY .
The weaker dollar, and expectations the global oil glut
would ease, lifted crude prices. Brent futures LCOc1 traded up
1.4 percent at $45.10, while U.S. crude futures CLc1 were up
57 cents, at $43.21 a barrel. O/R
Both remained off five-month highs hit last week.
An unexpected bond sale from the euro zone rescue fund kept
German Bund yields near five-week highs on Tuesday, as worries
grew that a recent rise in yields resembled the run-up to a
brutal sell-off that occurred in 2015. GVD/EUR