GLOBAL MARKETS-Shares, dollar rise on signs of global recovery

Wed Jan 8, 2014 1:00pm EST

* MSCI world equity index edges higher

* Dollar gains, U.S. government debt falls on ADP report

* Markets await release of Fed minutes from December

By Herbert Lash

NEW YORK, Jan 8 (Reuters) - Equity markets and the dollar edged higher on Wednesday as a pick-up in private sector jobs in the United States and solid economic data in Germany provided further evidence of an increase in global growth.

Gains were subdued as investors awaited the release of minutes from the Federal Reserve's last policy-setting meeting, when the U.S. central bank announced it would begin trimming its stimulative monthly bond purchases.

The yield on the benchmark U.S. 10-year Treasury note fell just below 3 percent.

The Fed minutes from the central bank's December meeting will be released at 2 p.m. EST (1900 GMT).

"Investors are digesting the rally we've seen lately as we await more information," said Paul Nolte, managing director at Dearborn Partners in Chicago. "Everyone wants to see what was behind the curtain of the last Fed meeting, to see what parameters were discussed with the taper or rates."

The dollar gained and U.S. stocks mostly rose after payrolls processor ADP said U.S. private employers added a higher-than-expected 238,000 jobs in December, the strongest increase in 13 months.

ADP's National Employment Report also revised November's job gains higher, just two days before the government's closely-watched monthly nonfarm payrolls report. That report is more comprehensive as it includes both public and private sector employment.

MSCI's world equity index, which tracks shares in 45 countries, rose 0.1 percent, putting it close to a six-year high. Overnight in Tokyo, the Nikkei jumped 1.9 percent to approach its own six-year peak.

On Wall Street, the Dow Jones industrial average was down 79.44 points, or 0.48 percent, at 16,451.50. The Standard & Poor's 500 Index was down 1.22 points, or 0.07 percent, at 1,836.66. The Nasdaq Composite Index was up 12.23 points, or 0.29 percent, at 4,165.41.

European stocks seesawed around 5-1/2-year highs again on Wednesday as equity markets in the euro zone periphery extended a rally on rising confidence their economies are starting to recover from the region's debt crisis.

German exports rose for the fourth consecutive month in November and industrial orders surged more than expected - mostly based on overseas demand - a sign that Europe's largest economy is benefiting from a nascent global upturn.

Spanish bond yields hit fresh four-year lows as markets took an increase in Madrid's planned 2014 debt issuance in stride, confident that rising growth would ensure sales go smoothly.

The pan-European FTSEurofirst 300 index of leading regional shares close up 0.11 percent at a provisional 1,321.19. The blue-chip Euro STOXX 50 index closed flat, losing 0.01 percent.

The U.S. dollar gained broadly; rising against the yen, the euro and a basket of currencies.

The dollar rose 0.35 percent to 104.97 yen and firmed against the euro, with the single currency last trading 0.40 percent lower at $1.3561.

Against a basket of six major currencies, the dollar index reached a six-week high of 81.048 and was last up 0.38 percent on the day at 81.137.

Crude oil prices rebounded in London with Brent crude for delivery in February rising 23 cents to $107.58 a barrel.

U.S. crude fell 72 cents to $92.95 a barrel.

Meanwhile, U.S. Treasury debt prices fell on the ADP report. The 10-year Treasury note slid 15/32 in price to yield 2.9950 percent, just over a week after hitting a near 2-1/2-year high yield of 3.041 percent, according to Reuters data.

Signs of a U.S. recovery have reassured some investors that the world's largest economy can withstand the Fed's decision to scale down its bond-buying program. The program drove many investors into equities by curtailing returns on cash and bonds, helping to fuel much of last year's stock market rally.

Markets are hoping the Fed minutes show a clear commitment to keeping rates low for a long time.

The European Central Bank meets on Thursday and analysts doubt it will do more than flag its readiness to act when needed, despite another surprising fall in euro zone inflation.

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