Stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in U.S. interest rates later in the week.
Oil prices resumed their fall and the euro rose against the dollar. Concerns in the high-risk U.S. corporate debt market about the potential impact of a rate hike weighed on low-rated euro zone government bonds.
European shares opened higher after hitting 2-1/2-month lows on Monday when oil prices fell to their weakest since 2008. The pan-European FTSEurofirst 300 index .FTEU3 rose 1.2 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up about 0.1 percent. Japan's Nikkei stock index .N225 ended down 1.7 percent at a 7-1/2-week low and Chinese stocks .SSEC .CSI300 lost 0.3-0.5 percent.
On Monday, U.S. stocks ended higher as oil pulled off its lows. However, Brent crude LCOc1 dropped 25 cents a barrel to $37.67 on Tuesday after falling the previous day to as low as $36.33, its weakest since December 2008. A fall below $36.20 would take it back to levels last seen in mid-2004.
The first U.S. rate rise since 2006 is largely priced in, with the Fed expected to increase its targeted rate range to 0.25-0.5 percent from the current zero to 0.25 percent.
The dollar index .DXY, which measures the U.S. currency against a basket of its peers, fell 0.2 percent. The euro EUR= rose 0.4 percent to $1.1031 while the yen JPY= gained 0.2 percent to 120.83 per dollar.
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