GLOBAL MARKETS-World shares hit new high, Europe shrugs off Greece worry

* Chinese rally leads Asian shares, Wall St set to rise

* Investors eye Fed, Bank of Japan meetings this week

* Dollar rises, oil hold above $65 a barrel

By Nigel Stephenson

LONDON, April 27 (Reuters) - World shares hit a new high on Monday, with European stocks joining the rally after early falls, as investors looked ahead to central bank meetings this week and put aside worries over Greece.

The dollar edged up but held close to Friday's 2 1/2-week lows, after weak U.S. data on Friday reinforced expectations the Federal Reserve would not raise interest rates any time soon.

The stock rally looked set to continue on Wall Street, with index futures indicating the market would open higher.

The pan-European FTSEurofirst 300 index was up 0.4 percent after falling in early deals on concern about a lack of progress in talks between indebted Greece and its creditors.

Deutsche Bank (Xetra: 514000 - news) , down 3.8 percent, took its toll on the index as investors gave a big strategic overhaul under co-chief executives Anshu Jain and Juergen Fitschen a thumbs down, though it rose off its lows.

"There are 2020 targets and savings/investment plans which we and the market will take with a grain of salt, given their chequered history," said Omar Fall, an analyst with Jefferies International.

The MSCI world equity index, which tracks shares in 45 countries, hit a new record high of 442.13 points before pulling back. It was last up 0.1 percent.

Chinese shares hit fresh seven-year highs on prospects of more stimulus, infrastructure projects, and state firm mergers.

The CSI300 index, which has almost doubled since late October, closed 2.2 percent higher.

Caution before a Bank of Japan policy decision on Thursday and over company earnings weighed on Japanese shares and the Nikkei 225 index ended down 0.2 percent.

Nonetheless, MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent to its highest since December 2007.

The dollar was up 0.3 percent against a basket of major currencies but still close to Friday's 2 1/2-week low.

The Fed begins a two-day policy meeting on Tuesday with a slew of recent sub-par indicators prompting analysts to downgrade their view of the U.S. economic outlook and to push back expectation of when the Fed will hike rates for the first time since June 2006 until later this year.

The dollar was up 0.4 percent at 119.33 yen, though Fitch cutting Japan's credit rating by one notch to A had little impact, and by a similar amount against the euro at $1.0824.

"It may be that the market is looking to get back into dollar longs and I think the extent to which the Fed is prepared to look through this weaker patch of data will be the important element this week," said Ian Stannard, European head of FX strategy at Morgan Stanley (Xetra: 885836 - news) in London.

LOW-RISK

Worries over Greece, which faces running out of cash within weeks unless it can reach agreements in talks that appear to be going nowhere, pushed yields on Greek government bonds higher and those on low-risk German debt lower.

"It is difficult to see how an agreement can be made at this stage," said Gianluca Ziglio, executive director of fixed income research at Sunrise Brokers. "The market has been unprepared for this," he said.

German 10-year yields last stood at 0.15 percent, steady on the day.

Brent crude oil prices held near a 4 1/2-month high above $65 a barrel, supported by worry that fighting in Yemen might disrupt supplies, and a fall in the number of active U.S. drilling rigs to its lowest since 2010. Brent last traded 26 cents lower at $65.02 a barrel.

Gold recovered from a five-week low, with investors focused on the Fed meeting. It last stood at $1,181.93 an ounce. (Additional reporting by Hideyuki Sano in Tokyo, Patrick Graham, John Geddie and Alexis Akwagyiram in London; Editing by Andrew Heavens and Toby Chopra)