LONDON (AP) — World stocks mostly rose Tuesday as investors awaited the outcome of the U.S. midterm elections and the Federal Reserve’s decision on how much it will pump into the U.S. economy to shore up the recovery.

In Europe, the FTSE 100 index of leading British shares was up 61.71 points, or 1.1 percent, at 5,756.33, while Germany’s DAX rose 54.13 points, or 0.8 percent, to 6,658.99.

The CAC-40 in France was 26.81 points, or 0.7 percent, higher at 3,867.92.

In the U.S., the Dow Jones industrial average was up 79.84 points, or 0.7 percent, at 11,204.46 soon after the open while the broader Standard & Poor’s 500 index rose 9.07 points, or 0.8 percent, to 1,193.45.

Stocks have been fairly buoyant so far this week after strong manufacturing surveys Monday in the world’s two biggest economies  the U.S. and China boosted hopes about the pace of the global recovery.

However, the forecast-busting report from the Institute for Supply Management has not altered expectations that the Federal Reserve will ease monetary policy further on Wednesday given subdued U.S. inflation and high unemployment.

Though figures last week showed the U.S. economy grew at a slightly faster than anticipated annualized rate of 2 percent in the third quarter, that is still not enough to bring down unemployment, which is hovering near 10 percent to the frustration of the Obama administration.

The consensus in the markets is that the central bank will announce monthly asset purchases of around $100 billion a month over the next six months at the conclusion of its two-day meeting on Wednesday.

Before the Federal Reserve statement, the markets will have the results of the Congressional elections in the U.S. to digest.

If opinion polls are correct, President Barack Obama will have to work with a Republican-dominated House of Representatives at the very least.

Many think that’s a recipe for policy inaction over the coming two years before the next presidential elections, meaning the Federal Reserve will have to play an even more crucial role in sustaining the U.S. economy.

Some think potential gridlock in Washington is good for the U.S. economy, especially if U.S. borrowing doesn’t increase further.

But Joshua Shapiro, chief U.S. economist at MFR, said that view is “seriously misguided in an environment where there are a myriad of structural fiscal problems that must be dealt with in a serious and bipartisan manner sooner rather than later.”

Earlier in Asia, markets mostly advanced.

Japan’s benchmark Nikkei 225 stock index rose 5.26 points, or 0.1 percent, to close at 9,159.98 and South Korea’s Kospi gained 0.2 percent to 1,918.04.

Hong Kong’s Hang Seng index added 0.1 percent to 23,671.42 and Chinese shares edged lower on profit-taking amid worries over possible shifts in monetary policy to counter excess liquidity the benchmark Shanghai Composite Index closed 0.3 percent lower at 3,045.43.

India’s main stock market in Mumbai fell after India’s central bank raised its key interest rates by a quarter point to contain persistently high inflation amid strong economic growth.

Australia’s S&P/ASX 200 eked out a 0.1 percent gain to 4,701.40 despite the Reserve Bank of Australia’s surprise decision to raise its main interest rate by a quarter of a percent to a two-year high of 4.75 percent.

There was far more of a reaction in the currency markets  the Australian dollar jumped more than one U.S. cent to trade above parity.

By mid afternoon London time, the Australian dollar was 1.3 percent firmer at $1.003.

Jane Foley, senior currency strategist at Rabobank International, said the Australian dollar is likely to remain firm over the coming months as the central bank is likely to continue raising borrowing costs.

Elsewhere, the euro was 0.9 percent higher at $1.4025 while the dollar was 0.4 percent firmer at 80.74 yen.

All eyes in the currency markets remain centered on the Fed and what it is planning to do  though the prospect of more dollars in the financial system has been a boon to stocks over the last few weeks, the dollar has tanked, particularly against the yen.

The dollar slumped to 80.21 yen Monday, hovering near a post-World War II record low of 79.75 yen set in 1995.

Benchmark oil for December delivery was up 41 cents at $83.36 a barrel in electronic trading on the New York Mercantile Exchange.

The contract jumped $1.52 to settle at $82.95 on Monday.

• PAN PYLAS