* FTSEurofirst 300 index up 2.5 percent

  * Break of key resistance would signal more upside

  * Financials, autos feature among top gainers

  By Atul Prakash

  LONDON, Sept 27 (Reuters) - European shares climbed to their highest in nearly a week on Tuesday morning, on renewed expectations European policymakers will act to contain Greece's debt problems and resolve a regional debt crisis threatening to derail the world economy.

  Financials, hit hard previously because of their exposure to peripheral euro zone economies, were among the top gainers, with the STOXX Europe 600 baking index up 3.2 percent and insurers up 4.1 percent.

  The indexes are still down 32 percent and 19 percent, respectively, in 2011.

  " Given so much uncertainty at the moment, there is room for both pessimism and optimism. The optimists have taken the forefront on hopes that we could see European politicians getting to grips with the current situation over the coming weeks," said Keith Bowman, analyst at Hargreaves Lansdown.

  " But there are still a lot of concerns. Investors remain sceptical about the success of the measures being planned to resolve the euro zone credit crisis."

  The FTSEurofirst 300 index was up 2.5 percent at 919.73 at 0813 GMT, after hitting 920.22, the highest since Sept. 21. It rose 1.8 percent on Monday on talk policymakers were drawing up plans to boost the size of the regional bailout fund, halve Greece's debts and recapitalise banks.

  The market awaited a policy meeting of the European Central Bank next week, with ECB officials saying on Monday they were keeping their options for a rate cut open. There were also some signals the bank could start offering 12-month, limit-free loans to banks again.

  Auto shares rose on hopes a solution for the euro zone crisis could bring the global economy back on track and improve demand for vehicles. The sector index rose 3.7 percent, while Daimler < DAIGn.DE> gained 4.9 percent after Credit Suisse upgraded its stock to " outperform" from " neutral" .

 

  KEY TECHNICAL LEVELS

  The Euro STOXX 50 , the euro zone's blue-chip index, was up 2.7 percent at 2,140.40 points, after climbing to its highest in more than a week earlier in the session.

  Analysts said the index was likely to stay in a 2,000-2,200 range in the coming session. If the price recovered above 2,098 -- a gap on the daily candlestick chart -- on a sustained basis, the index could test 2,200.

  " It is worth noting a possible double-bottom formation on the daily chart should the price recover above 2,200, which has the measuring targets at 2,343 and 2,436. It is important to watch the next three closes," Dmytro Bondar, technical analyst at RBS, said.

  Charts indicated that if the index closed below 2,000 in coming days, the move could suggest a drop to 1,810. (Editing by Dan Lalor)

CANBERRA (Reuters) - Australian women will be allowed to serve in frontline combat roles, including as special forces soldiers in Afghanistan, after the government said on Tuesday it was dropping all gender restrictions for the military.

  Australia, a close U.S. ally, will become the fourth country after Canada, New Zealand and Israel to open all combat roles to female soldiers who pass physical entry tests, Defence Minister Stephen Smith said.

  " Once this is fully implemented there will be no restrictions. If a woman is fully capable of doing the entrance programme for the Special Air Service or Commandos, they'll be in it," Smith told reporters.

  Australia currently allows women to serve in the vast majority of jobs in the 59,000-strong military, including on submarines and as air force jet fighter pilots.

  Women also serve in Afghanistan with frontline artillery units and as drone aircraft operators, but are barred from infantry combat units and special forces, which make up around 7 percent of army jobs.

  Entry to the elite SAS is particularly gruelling, involving endurance marches and mental tests over several days in the country's searing outback, while carrying weapons, water and an 80kg pack.

  The ban will be lifted immediately, but it may be up to five years before as the army must implement new tests on and train army doctors to operate on women, Smith said.

  He added that he expected no opposition from Australia's overseas allies, including U.S. and Afghan troops serving with Australian soldiers in southern Afghanistan's Uruzgan province.

  " I'm not expecting any difficulty as a result of what to the government and the service chiefs is a logical extension to a very strongly held view in Australian society that all of us are equal, irrespective of our sex," he said.

  Australia has around 1,550 troops in Afghanistan, based mainly at Tirin Kot in Uruzgan, and is the largest non-NATO member of the international coalition fighting Taliban insurgents in the country.

  Australia was an original member of the U.S.-led coalition that invaded the country to oust the Taliban, and has lost 29 soldiers in almost a decade of conflict.

  (Reporting by Rob Taylor Editing by Daniel Magnowski)

* Developers face increasing liquidity pressure

  * Tightening liquidity to push developers to cut prices

  * S& P does not see material sales decline in 2012

  * Worsening market conditions to drive industry consolidation (Recasts with details, quotes)

  By Charlie Zhu and Umesh Desai

  HONG KONG, Sept 27 (Reuters) - China's property developers are facing increasing liquidity pressure over the next six to 12 months and tightening credit conditions may see some cut prices, Standard and Poor's said on Tuesday.

  Niche players that develop high-end properties in top-tier Chinese cities such as Beijing and Shanghai may " feel the most heat" as these properties are generally affordable to only a highly concentrated group of investors, it said in a report.

  The most vulnerable are SRE Group Ltd , Shanghai Zendai Property Ltd , Coastal Greenland Ltd , Greentown China Holdings Ltd , Hopson Development Holdings Ltd , and SPG Land (Holdings) Ltd , the report said.

  " The worst isn't over for China's real estate developers. Weakening property sales and tightening credit conditions at home and globally are likely to increase the pressure on liquidity over the next six to 12 months," S& P said.

  Nearly two years of efforts by the Chinese government to cool the country's overheated property sector seem to be showing some impact in major Chinese cities. Housing inflation has shown signs of peaking, easing a touch in August, with home prices in major cities remaining flat for a second consecutive month, according to government data.

  Developers are likely to suffer " severe liquidity strain" and " struggle to meet their short-term obligations" if sales decline by 30 percent next year, the rating agency warned, adding, however, the likelihood of such a drop should be limited.

  Most of the 30 Chinese developers S& P currently rates could only absorb a 10 percent decline in property sales in 2012, the report said.

  However, for now, it did not expect any material decline in sales for developers in 2012, partly because of their heavy investments over the past two years that have increased inventories for sale.

  But China's increased implementation of measures to cool the property market would likely be a further sales damper for developers, it said.

  Potential policy initiatives include the roll-out of purchase restrictions to more cities, property price restrictions, and a further tightening of credit lines for buyers and developers, the report said.

  " We expect credit conditions to become increasingly severe for property developers. That would increase the impetus for companies to cut prices and look for alternative funding channels, many of which would be costly," it said.

  These alternative channels include offshore bonds and onshore trusts, but these may not be available when developers need them the most due to heightened credit risks and turmoil in the global capital markets.

  But the offshore capital market is virtually shut for Chinese sub-investment grade names because of the European debt crisis.

  Yields on the bonds are already reflecting equity-like returns, according to Thomson Reuters data. Shanghai Zendai bonds due June 2012 are quoted at around 87 cents on the dollar for a yield of an astounding 32 percent.

  Coastal Greenland bonds due 2012 trades at 91 and SRE Group bonds due 2013 trade at 78 cents on the dollar for a yield of 21 percent and 26 percent respectively.

  China has already imposed home purchase restrictions in about 40 cities, limiting the number of apartments a person can buy or barring non-local residents.

  The latest salvo in Beijing's battle to rein in the sector came last week, when the banking regulator ordered trust firms to detail their exposure to debt-laden Greentown. The move stoked concerns of a funding squeeze for the sector and sparked a selloff in shares and bonds in many other Hong Kong-listed Chinese developers.

  Many Hong Kong-listed developers are highly geared and some of them have relied on trust loans as a key source of financing in the absence of other channels of funding.

  S& P said lower-rated developers are much more reliant on trust financing than large ones, which still have access to onshore and offshore bank loans.

  Developers that it rates 'BB' or higher, such as China Resources Land Ltd. , Evergrande Real Estate Group Ltd. , and Shimao Property Holdings Ltd. are more sensitive to cuts in contract sales because of their large land premiums, short-term debt due, or construction costs, it said.

  But those with good bank relationship and parent support, such as China Resources Land, are in better position of weathering any liquidity pressure, the report said.

  With market conditions deteriorating, consolidation in China's highly fragmented property industry might accelerate with smaller ones disappearing or swallowed up by bigger rivals, S& P analysts said.

  There are an estimated 80,000 developers in China, with the top three accounting for less than 5 percent of the total market. (Additional reporting by Lee Chyen Yee Editing by Chris Lewis and Matt Driskill)

By Jeremy Gaunt, European Investment Correspondent

  LONDON, Sept 27 (Reuters) - World stocks rose for a third straight session on Tuesday, with European shares up 2 percent, as investors took comfort from reports that officials were working to add to measures to calm the euro zone debt crisis.

  After losing more than 7 percent last week, the MSCI all-country world stock index was up 1.5 percnet for a 2.5 percent rebound so far this week.

  The trigger has been rising expectations following weekend meetings of the International Monetary Fund that European policymakers will act to contain Greece's debt problems and resolve a debt crisis that threatens to do serious damage to the world economy.

  Some officials have said that plans are underway to boost the size of a regional bailout fund to cut Greece's debts and recapitalise banks, although others have underlined they are at a very early stage and Germany has said there are no plans to increase the size of the fund.

  " Given so much uncertainty at the moment, there is room for both pessimism and optimism. The optimists have taken the forefront on hopes that we could see European politicians getting to grips with the current situation over the coming weeks," said Keith Bowman, analyst at Hargreaves Lansdown.

  " But there are still a lot of concerns. Investors remain sceptical."

  The pan-European FTSEurofirst 300 index was up 2.4 percent after rising 1.8 percent on Monday.

  Japan's Nikkei gained 2.8 percent.

 

  EURO FLAT

  The relative bullishness did not spill over onto foreign exchange marketsm where the euro was flat at $1.3540, just above 8-month lows.

  " Any indication that European politicians will take fundamental steps to contain the debt crisis is positive for the euro, but we have had so many disappointments and this is not something that can be fixed overnight," said Niels Christensen, currency strategist at Nordea in Copenhagen.

  " A lot of investors are looking to reset new short euro positions around $1.36, maybe around current levels."

  The dollar was lower againstr a basket of currencies .

  Core euro zone debt prices were lower as the stock markets recovered. They have been rising sharply in a risk aversion trade.

  But eyes remained on the debt-strapped periphery.

  Italy will kick off a busy week of debt sales with short-term and zero coupon debt. The country will issue longer-term debt later this week in a more rigorous test of investor appetite for lower-rated euro zone paper. (Additional reporting by Jessica Mortimer and Atul Prakash editing by Patrick Graham)

* KOSPI up 5 pct, led by foreign buying

  * Shipyards, banks, refiners best performers

  By Ju-min Park

  SEOUL, Sept 27 (Reuters) - South Korean stocks made strong gains on Tuesday, rebounding from a selloff in the previous three sessions that dragged the market to its lowest level in more than 15 months.

  The Korea Composite Stock Price Index (KOSPI) ended 5.02 percent higher at 1,735.71 points, its biggest one-day percentage gain since January 28, 2009.

  " Unlike 2008 where people had little information before the Lehman collapse, stocks will have better odds of a soft landing between policy announcements and a series of shocks," said Park Yong-myung, a fund manager at Hanwha Investment Trust Management.

  Expectations for stability in Europe helped sentiment, analysts said, but investors may remain wary until they see concrete steps by eurozone officials to prevent fallout from the zone's debt issues.

  Foreign investors swung to net buying, snapping up 170.5 billion won ($142.9 million) worth of shares, ending a three-day selling streak.

  Public pension funds extended their buying streak to 15 sessions, supporting to the overall market.

  " Stocks are too cheap at this point due to excessive falls sentiment-wise," said Park Ok-hee, a market analyst at IBK Investment & Securities.

  Shipbuilders soared, with the world's largest shipbuilder Hyundai Heavy Industries jumping 11.2 percent and Daewoo Shipbuilding & Marine Engineering advancing 12.2 percent.

  Gains were also led by banks and crude oil refiners, helped by strength in the won , which lessens the cost of raising foreign-currency denominated debt for banks and the cost of importing crude oil for refiners.

  Shares in KB Financial Group jumped 9.2 percent and Shinhan Financial Group climbed 7.8 percent.

  S-Oil , the country's No.3 crude oil refiner, advanced 8.6 percent and SK Innovation rose 9 percent.

  Advancers outnumbered decliners by 740 to 133.

  KOSPI 200 Dec futures < KSc1> jumped 6.51 percent to 228.30. The KOSPI 200 spot index was up 5.19 percent to 225.29 and the junior Kosdaq market rose 5.83 percent at 433.41.

  Move on day +5.02 percent

  12-month high 2,231.47 27 April 2011

  12-month low 1,644.11 26 September 2011

  Change on yr -15.37 percent

  All-time high 2,231.47 27 April 2011

  All-time low 93.10 6 January 1981 ($1 = 1192.900 Korean Won) (Editing by Jonathan Hopfner)

HONG KONG, Sept 27 (Reuters) - Hong Kong shares snapped a four-day losing run on Tuesday as the best single-day performance in a year lifted the Hang Seng Index out of technically oversold conditions, but turnover declined for a second straight session.

  The Hang Seng Index closed up 4.15 percent at 18,130.55. The China Enterprises Index of top Hong Kong-listed Chinese companies outperformed, finishing up 6.4 percent at 9,294.22.

  The Shanghai Composite Index snapped a three-day decline, ending up 0.91 percent at 2,415.05, boosted by financial and energy counters as A-share turnover sank to the lowest in the last five sessions.

 

  HIGHLIGHTS:

  * Tuesday's gains lifted the Hang Seng Index off a 26-month closing low. In the near term, technical resistance is seen at around 18,296, the bottom end of a downside gap that opened between the intraday low on Sept. 21 and the opening high on Sept. 22. This gap is one of at least three that formed in September after the Hang Seng Index lost almost 13 percent this month.

  * Ping An Insurance (Group) Co of China Ltd was among the top percentage gainers among Hang Seng components. It jumped 10.1 percent after plunging 14 percent on Monday, triggered in part by foreign funds pulling money out of the company to bring back home as well as concern about its possible exposure to Hong Kong and China real estate trusts. . Ping An shares in Hong Kong have lost almost half their value so far this year, pushing multiples to the lowest since mid-2004. The stock trades at 10.4 times forward 12-month earnings compared with a historical median valuation of 24 times.

  * Materials names also saw strong gains. Jiangxi Copper Co Ltd jumped 17.3 percent in more than twice its 30-day average volume after sinking to the lowest since July 2009 on Monday. Aluminum Corp of China Ltd (Chalco) gained 6.7 percent. In a report on Monday, Goldman Sachs reiterated a buy rating on Jiangxi Copper based on its analysis implying a 29 percent upside to its share price. In the same report, Goldman analysts also assigned a buy rating on Chalco, saying their base scenario suggested a 68 percent upside potential for the stock on a 12-month basis. (Reporting by Clement Tan Editing by Chris Lewis)

* Gold snaps four days of declines, rises more than 1 pct

  * Eurozone optimism leads to weaker dollar, spurring commodities

  * Copper is most " exposed," Deutsche Bank says

  * Grains climb as drought disrupts seeding

  By Jane Lee

  SINGAPORE, Sept 27 (Reuters) - Oil and gold led gains in commodities in Asia on Tuesday as investors bet Europe's plan to shore up banks would reduce the risks of a widespread banking crisis in the euro zone, prompting investors to reduce holdings of the U.S. dollar.

  Spot gold rallied more than 1 percent, snapping four consecutive sessions of losses as a weaker dollar helped battered commodities stage a comeback. Brent crude < LCOc1> rose above $105 a barrel but is poised for a second quarter of decline.

  " In the last couple of days the market over-reacted to the situation in the euro zone and the United States," said Cameron Alexander, a senior metals analyst at GFMS, a unit of Thomson Reuters.

  Euro-zone officials are working to magnify the impact of the region's rescue fund, European Central Bank policymakers said on Monday, boosting hopes the region will be able to staunch a sovereign debt crisis that threatens world economic growth.

  The news pushed the dollar down 0.6 percent against a basket of currencies , making gold cheaper for holders of other currencies.

 

 

 

  Spot gold gained 1.7 percent to $1,654.99 an ounce by 0728 GMT, after sinking as much as 7 percent on Monday to a 7-1/2-month low near $1,530. U.S. gold < GCcv1> jumped 3.9 percent to $1,656.40.

  Gold's appeal as a safe-haven asset remains intact given the uncertainty in global growth and concerns about Europe's sovereign debt, and strong investment demand is likely to push gold towards $2,000 by the end of the year, Alexander said.

  Technical indicators suggested gold could see more short-term weakness. Spot gold may fall back to Monday's intraday low of $1,534.49 later in the day, said Reuters market analyst Wang Tao, who is looking for larger declines in the long term.

 

  " EXPOSED" COPPER

  In the event of a global recession, copper is the most " exposed" among the industrial metals, Deutsche Bank AG said in an e-mailed report on Tuesday.

  The most-active December copper contract < SCFc3> on the Shanghai Futures Exchange rebounded nearly 5 percent at one point soon after the open, but later pared gains by 750 yuan ($117.18) to 55,150 yuan per tonne by 0135 GMT.

  Three-month copper on the London Metal Exchange reversed direction, rising 1.4 percent to $7,365 a tonne after having tumbled to a 14-month low on recession fears.

  " The collapse in precious metal prices and specifically gold and silver prices may take weeks to repair," said Deutsche Bank's analysts, led by Michael Lewis.

  " However, the commitment by the U.S. Federal Reserve to keep interest rates on hold, central bank diversification and European sovereign risks are maintaining our bullish outlook."

  Grains rebounded, with corn and wheat climbing more than 1 percent amid forecasts supplies will tighten as drought affects planting.

 

  SWINGING OIL

  Brent futures < LCOc1> rose $1.16 to $105.10 a barrel by 0507 GMT, after climbing to as high as $105.58. U.S. crude < CLc1> gained $1.42 to $81.66 a barrel. It climbed more than $2 earlier.

  Brent and U.S. crude prices have stabilised after falling to seven-week lows and posting weekly losses of more than 7 percent last week.

  " Clarity on the euro zone plan is still key, crude prices are swinging back and forth depending on what comments come out of Europe," said Victor Say, an analyst with Informa Global Markets in Singapore.

  (With additional reporters by Francis Kan, Manolo Serapio, Jr, Rujun Shen and Naveen Thukral Editing by Clarence Fernandez)

HONG KONG, Sept 27 (Reuters) - The International Air Transport Association (IATA) said on Tuesday that the outlook for the global economy is very uncertain, but it does not expect a recession.

  " There is so much uncertainty over the world economy, obviously in Europe and United States," said IATA Director General and Chief Executive Tony Tyler at a media briefing in Hong Kong.

  Earlier this month, IATA forecast a 29 percent decline in 2012 industry-wide profit to $4.9 billion on the back of a weak global economy and stubbornly high jet fuel prices.

  The group, whose 230 members carry more than 93 percent of scheduled international air traffic, revised up its earnings forecast for the industry to $6.9 billion this year from a $4 billion forecast it made in June. (Reporting by Alison Leung Editing by Chris Lewis)

* Spot, US gold snap 4 sessions of losses

  * Spot gold may fall to $1,534.49 - technicals

  * Coming up: U.S. consumer confidence, September 1400 GMT (Adds comments, details updates prices)

  By Rujun Shen

  SINGAPORE, Sept 27 (Reuters) - Spot gold rallied 1 percent on Tuesday, snapping four consecutive sessions of losses as a weaker dollar helped battered commodities stage a comeback.

  Euro-zone officials are working to magnify the firepower of the region's rescue fund, European Central Bank policymakers said on Monday, boosting hopes the region will be able to staunch a sovereign debt crisis that threatens the world economy.

  The news pushed the dollar down 0.6 percent against a basket of currencies , making gold cheaper for holders of other currencies.

  Spot gold gained 1 percent to $1,644.40 an ounce by 0330 GMT, after sinking as much as 7 percent to a 7-1/2-month low near $1,530 in the widest daily swing on record on Monday.

  U.S. gold < GCcv1> rose 3.3 percent to $1,647.10.

  " In the last couple of days the market over-reacted to the situation in the euro zone and the U.S.," said Cameron Alexander, senior metals analyst at GFMS, a unit of Thomson Reuters.

  Gold's appeal as a safe-haven asset remains intact given the uncertainty in global growth and concerns about Europe's sovereign debt, and strong investment demand is likely to push gold towards $2,000 by the end of the year, said Alexander.

  Technical indicators suggested gold could see more short-term weakness. Spot gold may fall back to Monday's intraday low of $1,534.49 later in the day, said Reuters market analyst Wang Tao, who is looking for even larger falls in the long term.

  Investors are eyeing a key vote in the German parliament this Thursday to approve changes to the European Financial Stability Facility rescue fund.

  " There may be another leg lower in gold, as people position themselves ahead of the EFSF votes in case there was a good outcome that would lead to a sell-off in the dollar and rising risk appetite," said a Singapore-based trader.

 

  Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , fell 0.4 percent to 1,246.762 tonnes by Sept. 26, after standing unchanged for four sessions.

  Physical buying has increased over the past week or so, as spot gold prices sank nearly 10 percent in the past four sessions.

  " At the current level people are buying, because they believed what happened in the past few days was only a correction," said Ronald Leung, a physical dealer at Lee Cheong Gold Dealers in Hong Kong.

  The premium on gold bars in Hong Kong had risen to more than $2 per ounce above spot prices, as a result of increased demand, he added.

  Other precious metals also rebounded from Monday's trough. Spot silver rallied 2.8 percent to $31.51, before easing slightly to $31.30.

  U.S. silver < SIcv1> jumped 5.4 percent to a high of $31.58, on course for its biggest one-day rise in two and a half months.

 

  Precious metals prices 0330 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1644.40 17.55 +1.08 15.85 Spot Silver 31.30 0.64 +2.09 1.43 Spot Platinum 1561.00 5.87 +0.38 -11.68 Spot Palladium 628.99 1.76 +0.28 -21.33 TOCOM Gold 4044.00 167.00 +4.31 8.45 103033 TOCOM Platinum 3867.00 150.00 +4.04 -17.65 16453 TOCOM Silver 75.80 6.90 +10.01 -6.42 2616 TOCOM Palladium 1557.00 42.00 +2.77 -25.75 827 COMEX GOLD DEC1 1647.10 52.30 +3.28 15.88 21640 COMEX SILVER DEC1 31.36 1.38 +4.62 1.36 3302 Euro/Dollar 1.3544 Dollar/Yen 76.27 TOCOM prices in yen per gram. Spot prices in $ per ounce. COMEX gold and silver contracts show the most active months (Editing by Michael Urquhart)

By Francis Kan

  SINGAPORE (Reuters) - Brent crude rose above $105 on Tuesday, as concerns over Europe's debt crisis eased temporarily and a weaker U.S. dollar sparked buying of dollar-denominated assets.

  Euro zone officials are working to boost the firepower of the region's rescue fund, European Central Bank policymakers said on Monday, while U.S. President Barack Obama piled on pressure for Europe to staunch a sovereign debt crisis that threatens the world economy.

  However, analysts were wary about the rally as markets remain prone to swings in risk appetite, with investors waiting for details on the rescue plan.

  " Clarity on the euro zone plan is still key, crude prices are swinging back and forth depending on what comments come out of Europe," said Victor Say, an analyst with Informa Global Markets in Singapore.

  " Commodities have also been boosted by a weaker dollar and short covering after the recent sell-down."

  Brent futures rose $1.16 to $105.10 a barrel by 0507 GMT, after climbing to as high as $105.58. U.S. crude gained $1.42 to $81.66 a barrel. It rose more than $2 earlier.

  Brent and U.S. crude prices have stabilised after falling to seven-week lows and posting weekly losses of more than 7 and 9 percent last week, respectively.

  The U.S. dollar was down 0.46 percent against a basket of currencies on hopes for a resolution to the euro zone crisis, lifting commodities priced in the greenback.

  Spot gold rallied 1 percent on Tuesday, snapping four consecutive sessions of losses, while spot silver gained 2.8 percent.

  Turbulence in global markets since late July has been driven by investors' twin fears of renewed recession in the United States, and the chaos that Europe's sovereign debt crisis could inflict on the financial system if it continues unchecked.

  " Much of the immediate action in oil is simply based on the same climate of economic fear that is battering all other asset classes, which then creates a cascading effect involving technical triggers, precipitous price falls and a disregard for the underlying fundamentals," said Barclays Capital analysts in a research note.

  Markets remain volatile, with Brent expected to retrace to $102.81 before rebounding further to $105.75 per barrel, while U.S. crude is expected to revisit its previous trading session's low of $77.11 per barrel, according to Reuters market analyst Wang Tao.

  U.S. INVENTORIES, MIDDLE EAST

  U.S. commercial crude stockpiles are expected to have fallen slightly last week, with product inventories expected to show builds, a preliminary Reuters poll of analysts showed on Monday.

  Forecasts for a small decline follow the steep 7.34 million barrel drop in crude stockpiles reported by the EIA for the week to September 16, which sent inventories to the lowest level since January.

  Investors are still eyeing the political unrest and conflict in the oil-producing region of the Middle East and North Africa, even as Libya moves to restart its oil production.

  Italy's Eni said it has restarted oil output from 15 wells, and a tanker is loading condensate at the Libyan port of Mellitah with another due to arrive on Tuesday to pick up a cargo that is most likely to be crude oil, the terminal's harbor master told Reuters.

  In Syria, four soldiers were shot dead on Monday as they tried to escape a military camp and troops sealed off towns in a continuing crackdown on opponents of President Bashar al-Assad, activists said.

NEW YORK, Sept 26 (Reuters) - U.S. 30-year Treasury bonds fell a point in price on Monday as hopes that European leaders would devote more funds to deal with the region's debt crisis dampened the bid for safe-haven U.S. bonds.

  The bonds temporarily fell a point in price and yields rose as high as 2.95 percent, up from 2.90 percent late on Friday. (Reporting by Karen Brettell Editing by James Dalgleish)

NEW YORK, Sept 26 (Reuters) - Easy U.S. monetary policy is appropriate given the weak economic backdrop, St. Louis Federal Reserve Bank President James Bullard said on Monday.

  " Monetary policy is ultra-loose right now, appropriately so," he told a conference hosted by Medley Global Advisors and the Financial Times.

  Asked whether the Fed should target higher inflation, Bullard said: " I don't think high inflation is a good solution to this problem." (Reporting by Kristina Cooke Editing by James Dalgleish)

  * Raskin - Fed easing actions " completely appropriate"

  * Transmission of Fed efforts has been muted

  * More easing warranted under circumstances (Adds details, background, byline)

  By Mark Felsenthal

  WASHINGTON, Sept 26 (Reuters) - Expanded Federal Reserve efforts to boost tepid growth and cut high unemployment are justified as broken housing markets and depleted household wealth act as a brake on the recovery, a top Fed official said on Monday.

  Even though the effect of aggressive Fed policies to ease financial conditions has been muted by declines in house values and consumer reticence, it would be wrong to conclude central bank actions are useless, Federal Reserve Governor Sarah Raskin said.

  " The opposite conclusion might well be the case -- namely that additional policy accommodation is warranted under present circumstances," she said at an event sponsored by the University of Maryland Smith School of Business.

  The Fed's aggressive actions have been " completely appropriate" in promoting job growth, Raskin said. Both fiscal and monetary policymakers should be considering a wide array of approaches for fostering job creation, she said.

  Raskin's comments are the first statement on policy by a Fed official after a decision Sept. 20-21 to launch a new tool aimed at jump-starting weak growth. They reflect the views of an activist wing of policymakers. The Fed announced $400 billion in long-term bond purchases matched with sales of the same amount of short-term securities in a bid to push down longer-term interest rates.

  The Fed also announced it would resume buying mortgage-related debt in an effort to help depressed housing markets recover.

  Raskin's support for Fed action stands in contrast to the three Fed officials who dissented against the decision to take further measures last week. All three are due to speak later this week.

  The Fed cut benchmark short term rates to near zero almost three years ago and has bought $2.3 trillion in longer term assets to further stimulate economic activity. Fed officials are divided over the issue. A core group believe the central bank should do what it can to prevent persistently high unemployment from slowing growth to the point the economy slides back into recession.

  Fed officials are discussing measures including giving specific targets for unemployment and inflation that would reassure markets that the Fed won't quickly change the course of its ultra-loose policy.

  Raskin said she would not support any policies that would permit inflation that is higher than what the Fed believes is optimal - 2 percent or a bit less.

  " Raising inflation or raising inflation expectations ... is something I would be quite leery of," she said on Monday in response to questions after a speech to a University of Maryland event. " Keeping inflationary expectations anchored is in my mind extremely important." (Reporting by Mark Felsenthal Editing by Chizu Nomiyama Editing by Andrew Hay)