* Punchy ADP jobs data adds to Fed taper talk, dollar claws
* European shares buckle, world shares down for third day
* Wall Street expected to see another subdued start
* Yen off 6-month lows, Aussie dollar hits 3-month low
By Marc Jones
LONDON, Dec 4 World shares fell for a third day
on Wednesday and gold dropped to a five-month low, as focus
returned to whether the U.S. Federal Reserve will start to wind
down its bond-buying stimulus as soon as this month or next.
The to-and-fro of when the Fed will begin to halt the flow
of cheap dollars has dominated trading worldwide for months. A
run of data ending in the main U.S. jobs indicator - non-farm
payrolls - on Friday may yet tip the balance again.
Polls of analysts and traders still point firmly to the U.S.
central bank holding fire until next March but some stronger
data has reheated speculation it could move earlier.
That prompted investors to cash in gains from recent
rallies, and despite a steadier morning, European stocks
were on the slide again as the Wall Street open neared,
after suffering their biggest tumble since August on Tuesday.
A better-than-expected ADP jobs report, which showed U.S.
private employers added a chunky 215,000 jobs in November,
bolstered the feeling that payrolls on Friday may be strong.
But Johan Jooste, head of fund manager Julius Baer's London
investment office said it wasn't necessarily the start of the
Fed's withdrawal that would drive the market's reaction.
"The whole market has been focused on when tapering will
start, but what I would ask (incoming Fed chief) Janet Yellen is
when does she perceive it ending.
"If the Fed starts in Jan or March I'm not so sure that's
necessarily the big deal, but it's a bigger deal if it ends it
quickly," Jooste added.
The worry is that the reduction in Fed support will be like
a stab with a pin for recently inflated asset prices.
A sharp 2.2 percent fall for the Nikkei in Tokyo as
it recoiled from a six-year high had led Asia lower overnight,
and with Europe buckling again MSCI's world share index extended
its losses for the day to 0.5 percent.
Wall Street had been expected to open slightly higher after
Tuesday's falls but the robust data helped cement a turnaround
in futures prices, with the Dow Jones industrial average
the S&P 500 Index now expected to dip again.
In the FX market, the dollar remained lower against the yen
and a basket of currencies but as the data pushed
benchmark U.S. Treasury yields back above 2.8
percent, upwards pressure was starting to be felt.
Ahead of the European Central Bank's meeting on Thursday,
mixed euro zone PMI data reinforced the differing fortunes of
its main economies, though having only cut rates last month
additional measures from the bank look unlikely for now.
Britain is currently one of Europe's best performing
economies, but high-flying sterling saw its wings clipped
as growth in the dominant service sector slowed a
little last month, breaking a run of upside data surprises.
The spectre of cuts in the Fed's bond-buying continued to
cast a shadow over emerging market shares and currencies. They
were among the hardest-hit when Fed Chairman Ben Bernanke first
floated the prospect of "tapering" back in May.
MSCI's emerging market spent a third day in the
red, while the Indonesian rupiah weakened 0.9 percent to 11,975
rupiah per dollar after earlier falling to 12,000 to
match a near five-year low touched last week.
William de Vijlder, chief investment officer at BNP Paribas
said that while further sell-offs were likely in EM assets, they
shouldn't be as dramatic as earlier in the year.
"We call it 'tapering echoes'. With each echo you have, the
intensity of the noise fades," he said.
With Ukraine's under-fire president out of the country,
there was a temporary lull in the political tensions that have
rattled its markets hard in recent days.
In Thailand were there has also been recent upheaval, the
baht also stabilised at around 32.26 baht per dollar
after the country's navy chief ruled out a coup after days of
AUSSIE, GOLD DOWN
Back in Europe, the euro began to back-pedal from $1.3550 as
the dollar flexed its muscles again, having hit a two-month low
against the Swiss franc following the euro zone data.
A buoyant Germany was not enough to stop the 17-nation euro
zone's private sector losing momentum in November, dragged
backwards by a downturn in France - the bloc's second biggest
economy - and a continued recession in Italy.
Down under, the Australian dollar saw its biggest
fall since July as it plunged to a three-month low of $0.9025
after data showed its economy running slower than expected.
Oil prices jumped ahead of this week's OPEC meeting, with
U.S. crude futures hitting a five-week high and Brent
holding comfortably above $112 a barrel.
But gold and silver, which like stocks have benefited from
the U.S. stimulus because of inflation fears, traded near
five-month lows. Gold last stood at $1,213 per ounce
while silver traded at $19.04, having slipped to $18.94
"There is definitely an attitude of wait-and-see in other
assets and more selling pressure in gold," Mitsubishi analyst
Jonathan Butler said. "The next leg down is being awaited and
the stimulus for that could be the (U.S. jobs) numbers on