(Updates with afternoon U.S. trading) * MSCI world index recovers as Wall St gains * Europe share gauge rebounds, DAX jumps * U.S. dollar holds steady, gold higher * Key central bank meetings this week in U.S., Britain, Japan NEW YORK/LONDON, Sept 21 (Reuters) - World stock markets edged back on Tuesday while the U.S. dollar held relatively steady a day after heavy selling in equities, as investors assessed the level of contagion stemming from the distress of debt-saddled developer China Evergrande. MSCI’s gauge of stocks across the globe gained 0.35%, following Monday’s biggest percentage drop in two months. European indexes rose solidly while Wall Street’s main gauges were gaining in afternoon trade. Price moves in bonds and currencies were relatively subdued. On Monday, safe-haven assets drew bids as investors became risk averse. Investors were still focused on the situation at Evergrande, where persistent default fears eclipsed efforts by the debt-laden group’s chairman to lift confidence as Beijing showed no sign it would intervene to stem any domino effects across the global economy. “There are still issues that the market is dealing with,” said David Joy, chief market strategist at Ameriprise Financial in Boston. “But stabilization is a good thing after the downdraft that we had yesterday.” On Wall Street, the Dow Jones Industrial Average rose 128.56 points, or 0.38%, to 34,099.03, the S&P 500 gained 13.23 points, or 0.30%, to 4,370.96 and the Nasdaq Composite added 66.90 points, or 0.45%, to 14,780.80. The Cboe Volatility Index retreated after hitting a four-month high a day earlier, last down 2.25 points to 23.46. The pan-European STOXX 600 index rose 1%, with Germany’s DAX rising 1.4%. Canada’s main stock index gained as Prime Minister Justin Trudeau’s limited victory in the federal election raised hopes that his government would keep the stimulus taps open. Central bank meetings in the United States and elsewhere in the world were soon to take center stage for markets, with a Federal Reserve meeting due to conclude on Wednesday as investors look for when it will ease its bond-buying program. In currency trading, the dollar index fell 0.053%, with the euro up 0.02% to $1.1727. The Japanese yen strengthened 0.12% versus the greenback at 109.25 per dollar. “There is just a lot of wait-and-see as far as what is going to happen with the Fed, what is going to happen with Evergrande, and right now if you are trying to make a dollar bet you really just want to wait until you get a better sense of what is going to happen with Evergrande and what the Chinese government is going to do,” said Edward Moya, senior market analyst at OANDA in New York. Benchmark 10-year notes last fell 3/32 in price to yield 1.318%, from 1.309% late on Monday. Oil prices edged higher in a see-saw session, as concerns about the global consumption outlook counterbalanced the struggle by big OPEC producers to pump enough supply to meet growing demand. U.S. crude rose 0.23% to $70.45 per barrel and Brent was at $74.07, up 0.2% on the day. Spot gold added 0.7% to $1,776.27 an ounce.