Stocks on Wall Street slipped and shares in Europe rose yesterday, reflecting diverging policies between the Federal Reserve and the European Central Bank, while oil prices fell as data showed US crude inventories hit a record high.

US stocks were lower ahead of the Fed's highly anticipated policy statement at 2pm (1800 GMT) and news conference half an hour later, with the US central bank expected to lay the groundwork for its first interest rate hike in nearly a decade.

The Fed is weighing whether the US recovery can hold up against collapsing oil prices, which are taking a toll on segments of the economy, and a soaring dollar that already has eaten away at profits of US multinational corporations.

Expectations of the first Fed rate hike since June 2006, coupled with the start of the ECB's asset-buying program last week, have driven down the euro against the dollar and sparked a rally in European stocks.

The FTSEurofirst 300 index of top European shares rose 0.33 per cent to close at a provisional 1,589.07, while MSCI's all-country world index of equity performance in 46 countries was up 0.15 per cent.

The FTSEurofirst 300 is up more than 16 per cent so far this year and Germany's DAX up 22 per cent, even after falling the past two sessions from Monday's record close.

“The (US stock) market is going to have trouble with interest rates the rest of the year,”said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis. Oil might be pressuring things a little bit,' he said.

“There's a lot in there for the market to be very volatile today.”

The dollar has strengthened against most major currencies as two dozen central banks around the world have eased monetary policy and weakened their currencies against the greenback at the same time .