* World shares set to snap seven days of gains
* Wall Street set to open lower
* Nerves over U.S.-China talks spark selling in Asia and Europe
* German stocks underperform on Bayer jury ruling
* Dollar edges up on trade talk tension
* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh (Updates prices throughout; adds Wall Street futures)
By Tom Wilson
LONDON, March 20 (Reuters) - World shares' longest rally of the year looked set to stumble on Wednesday as investors took profits before a U.S. Federal Reserve's policy decision, which is expected to offer clues to interest rate prospects for the coming year.
European stock markets followed a lacklustre Asian session, putting the MSCI gauge of global stocks on course to end seven days of gains, as reports of renewed tension in U.S.-China trade talks frayed nerves.
The Euro STOXX 600 fell 0.4 percent. Indexes in Britain and France lost ground as investors closed positions before the Fed's decision, due at 1800 GMT. .
Germany underperformed, its index dragged down 1.3 percent. Chemicals group Bayer AG faced its worst day in 16 years after a second U.S. jury ruled its Roundup weedkiller caused cancer.
The U.S. central bank is expected to leave rates unchanged and cut the number of interest rate increases projected for the rest of the year. It has maintained since early this year a "patient" approach to raising rates.
That patience has come as the United States and other parts of the world begin to exhibit signs of slowing growth. Traders now expect no rate increases this year and some are even building in bets for a cut in 2020.
"Some traders expect the Fed to be a little on the neutral side. The Fed will be optimistic - but not overly optimistic - to send a neutral but upbeat message to the market," said David Madden, an analyst at CMC Markets in London.
Also in play was rising tension in the U.S. trade negotiations, which pushed MSCI's broadest index of Asia-Pacific shares outside Japan down 0.2 percent.
Some market players said investors took money off the table after a report China is pushing back against American demands in trade talks. On the whole, though, many investors still hope for a deal between Washington and Beijing.
Talks are set to resume next week - the first since President Donald Trump delayed a March 1 deadline to raise tariffs on Chinese imports - in an acceleration aimed at ending an eight-month trade war between the world's two largest economies.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to China next week for another round of talks with Chinese Vice Premier Liu He.
"China is eager to come to an agreement, so I'm not too worried," said Wang Shenshen, a strategist at Tokai Tokyo Research Center. "As long as they are holding meetings, many things will work out."
The reports of increased tension in trade talks pushed the dollar up 0.1 percent to 96.434 against a basket of major currencies, with safe-haven bids rising. Gains were slim as the Fed decision approached.
Sterling fell 0.2 percent to $1.3234 amid turmoil over Britain's exit from the European Union.
Prime Minister Theresa May will request a short delay to Brexit on Wednesday after her failure to get an agreement through parliament, leaving the future of Brexit uncertain.
Kazakhstan's tenge fell half a percent against the dollar as Kassym-Jomart Tokayev, a career diplomat fluent in Russian, English and Chinese, was sworn in as president.
Tokayev pledged to continue the policies of veteran leader Nursultan Nazarbayev, who unexpectedly resigned on Tuesday after three decades in power. It was unclear whether Tokayev, the former prime minister, would run for a full term as president.
Oil prices fell, dragged down by concerns about global economic growth as the U.S.-China trade dispute rumbled on, but got some support from tightened supply.
International Brent crude oil futures were at $67.42 a barrel late morning, down 0.3 percent from their last close.
For Reuters Live Markets blog on European and UK stock markets, please click on: (Reporting by Tom Wilson, additional reporting by Hideyuki Sano in Tokyo, editing by Larry King)