* Fed says will likely begin tapering by as soon as November * Evergrande soars as debt crunch looms * Dollar retreats from 1-month high, gold loses ground * Oil prices boosted by tight supplies NEW YORK/LONDON, Sept 23 (Reuters) - World stock markets rallied on Thursday and the U.S. dollar retreated from one-month highs as risk appetite heated up as investors digested the Federal Reserve’s plans for reining in stimulus and worries about contagion from China Evegrande calmed. Wall Street’s S&P 500 surged over 1% in early trade following solid gains in Europe. MSCI’s gauge of stocks across the globe rose 1%, with the index recovering all its losses from Monday, when it posted its biggest percentage drop in two months. Safe-haven trades faded after benefiting earlier in the week, with gold prices dropping. “We are seeing markets rally on the premise that while the situation in China particularly with Evergrande is not going away, the outcome is not perhaps going to be as severe or prompt some form of contagion that was originally feared,” said Craig Fehr, investment strategist at Edward Jones. “You combine that with the fact that the tone that the Fed struck yesterday at its meeting suggests that while a reduction in stimulus is certainly coming, the Fed is not particularly eager to start tightening policy dramatically in the near term.” The Fed on Wednesday said it will likely begin reducing its monthly bond purchases as soon as November and signalled interest rate increases may follow more quickly than expected as the U.S. central bank’s turn from pandemic crisis policies gains momentum. In Hong Kong, shares of debt-laden property group Evergrande jumped 18% ahead of a key debt payment deadline. Fears the group’s distress could spill into the broad economy helped spark an equity sell-off to start the week. On Wall Street, the Dow Jones Industrial Average rose 449.97 points, or 1.31%, to 34,708.29, the S&P 500 gained 53.01 points, or 1.21%, to 4,448.65 and the Nasdaq Composite added 147.44 points, or 0.99%, to 15,044.28. The pan-European STOXX 600 index rose 1.03%. Norway’s central bank raised its benchmark interest rate and said it expects to hike again in December, joining a short but growing list of nations moving away from emergency-level borrowing costs. Norway’s crown strengthened to its highest level since mid-June versus the euro. In other currency trading, the dollar index fell 0.506%, after hitting a one-month high earlier, with the euro up 0.49% to $1.1743. The Japanese yen weakened 0.26% versus the greenback to 110.07 per dollar. Benchmark U.S. 10-year notes last fell 10/32 in price to yield 1.3652%, from 1.331% late on Wednesday. Oil prices rose, supported by growing fuel demand and a draw in U.S. crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes. U.S. crude rose 1.14% to $73.05 per barrel and Brent was at $76.80, up 0.8% on the day. Spot gold dropped 0.9% to $1,752.70 an ounce.