* World shares gain 0.3 pct in subdued trade
* Disappointing BOJ action sends yen higher vs dollar
* Oil edges up, storm Sandy cut demand but may damage plant
* U.S. stock, bond markets closed on Tuesday due to storm
By Richard Hubbard
LONDON, Oct 30 (Reuters) - World shares rose modestly in subdued trading on Tuesday as investors waited to see the full impact of a massive storm that wrought destruction across the eastern United States.
The monster storm, code-named Sandy, was responsible for at least 15 deaths, left millions without power, and has closed much of New York’s financial district.
Wall Street shut for a second day, and bond trading was also halted as the focus switched to whether markets would be able to resume activity on the final day of the month on Wednesday, which is key to pricing investment portfolios.
The FTSEurofirst 300 index of top European shares was up 0.75 percent at 1,101.75 points and, after gains earlier in Asia, the MSCI world equity index had risen 0.3 percent to 328.86 points.
U.S. stock index futures, which kept trading in Europe, edged lower, but volumes were very light.
“We’re a bit lost without Wall Street, frankly,” said Alexandre Tixier, technical analyst at TradingSat, in Paris.
Across European stock markets, attention was on corporate earnings, with results from well known names like Germany’s Deutsche Bank, Swiss banking giant UBS and oil major BP lifting prices. UBS shares leapt over four percent as it confirmed a plan to cut 10,000 jobs.
Britain’s FTSE 100 index was up 0.75 percent, Germany’s DAX index up 0.9 percent and Switzerland’s SMI index up 0.5 percent.
In the currency markets, which remained open, the dollar lost ground against a resurgent yen after the Bank of Japan eased policy less aggressively than had been hoped for at its regular policy setting meeting.
The BOJ increased its monetary stimulus for a second month running, this time by 11 trillion yen ($138.5 billion), disappointing many who had positioned for a more aggressive increase.
“It was a very sceptical response to the BOJ policy meeting, made worse by the fact they have revised lower the growth and inflation outlook,” said Jane Foley, senior currency strategist at Rabobank. “That has seen the yen unwind a lot of the softer tone we saw going into this meeting.”
The dollar hit a one-week low of 79.25 yen and was down 0.3 percent against a basket of major currencies at 79.67 points.
The weaker dollar helped the European common currency climb 0.4 percent to $1.2958, while news the Spanish economy had shrunk slightly less than expected in the third quarter and Italy’s borrowing costs had fallen also supported the euro.
But gains for the single currency are expected to be limited by continuing questions over whether Greece can agree a deal with its creditors, and when Spain might request financial aid.
Spain’s economy contracted for a fifth straight quarter between July and September, and prices rose, according to new data, keeping pressure on the government to take some action as the prospect of further civil unrest grows.
“Spain’s economy is suffering terribly, which will continue to hit government revenues, and a modest decline in bond yields will not solve the problem,” said Kit Juckes, strategist at Societe Generale.
Prime Minister Mariano Rajoy has maintained an ambivalent stance towards applying for a politically embarrassing rescue that would kickstart an ECB bond-buying programme and ease financing costs.
Investors, too, seem willing to wait; 10-year Spanish bond yields were little changed at 5.67 percent.
German government bonds, the benchmark of European fixed-income markets, were also mostly flat.
Italy was even able to sell 7 billion euros of new five- and 10-year government bonds at its lowest cost since May 2011.
Italian 10-year yields dipped 1 basis point lower on the day to 5 percent, having risen about 25 basis points in the last two weeks.
In oil markets, prices were edging higher as traders awaited news of the damage inflicted by Sandy on refineries and pipelines on the U.S. east coast, though weaker demand from the storm-hit region capped gains.
Brent crude for December rose 8 cents to $109.36 a barrel, recovering from a fall to $108.75 earlier, while U.S. crude for December was up 60 cents at $86.14.
U.S. gasoline futures were little changed at $2.7530 a gallon, after climbing more than 5 cents on Monday on expectations of tighter supply.
“People are just holding back a little bit to see if there’s any real damage and impact, and at the moment it’s too hard to see,” said Bjarne Schieldrop, an analyst at SEB in Oslo.