* Eurpean stocks at 3-week closing high; Wall St rises
* Euro rises versus dollar on rate outlook
* Yen hits 10-month low against euro (Updates prices, adds analyst quote on ADP jobs report)
By Barani Krishnan
NEW YORK, March 30 (Reuters) - World stocks rose more than 1 percent on Wednesday as strong hiring by U.S. private employers boosted both U.S. and European markets, while the euro rose against the dollar after remarks by a European policy maker.
A report by ADP that U.S. private employers added 201,000 jobs in March buoyed expectations over the pace of economic recovery in the United States, the world's largest economy.
MSCI's all-country world stock index <.MIWD00000PUS> gained more than 1.0 percent while European shares hit a three-week closing high, and U.S. shares rose.
In currency markets, the euro turned higher against the dollar after European Central Bank executive board member, Lorenzo Bini Smaghi, said the bank's policy is to gradually raise interest rates.
The euro rose to the day's highs at $1.4148
Bini Smaghi's comments suggested that "a series of rate hikes may be coming this year," said Brian Dolan, chief strategist at Forex.com.
The Japanese yen slipped to a 10-month low versus the euro and a near three-month low against the dollar as recent hawkish comments from euro zone and U.S. officials on interest rates contrasted with Japan's loose monetary policy stance.
The yen fell against the euro to 117.28 yen. Against the U.S. dollar, the yen fell to 83.19 yen
Rising risk appetite encouraged investors to seek higher-yielding assets, with the Australian dollar
Graphic on year-to-date gains across asset classes:
http://r.reuters.com/kyw48p ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
ADP JOBS REPORT BOLSTERS WALL STREET
On Wall Street, shares rose as the ADP report did little to shake up expectations for Friday's closely watched government report on non-farm payrolls and as investors positioned for the quarter's end.[ID:nN30275708]
The Dow Jones industrial average <.DJI> was up 70.62 points, or 0.58 percent, at 12,349.63. The Standard & Poor's 500 Index <.SPX> was up 8.54 points, or 0.65 percent, at 1,327.98. The Nasdaq Composite Index <.IXIC> was up 16.47 points, or 0.60 percent, at 2,773.36.
Merger and acquisition activity also supported sentiment
after Canadian drugmaker Valeant Pharmaceuticals International
"M&A activity has been very consistent over a broad array of sectors with incredible premiums, and that's one of the biggest catalysts for the market's rebound," said Alan Lancz, president at Alan B. Lancz & Associates Inc, an investment advisory firm based in Toledo, Ohio.
The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed 0.8 percent higher at 1,134.63 points, its highest closing level since March 9.
"We have worked through the oversold conditions and technically the markets are in a very strong and favorable condition to respond to good newsflow. If we do get good non-farm payrolls, the market will do very very well," said Mike Lenhoff, chief strategist at Brewin Dolphin.
Oil prices see-sawed, kept within a tight range as markets
juggled the impact of data showing rising crude oil inventories
in the United States while uncertainty over Libya and the
Middle East limited losses. U.S. crude
But copper, an industrial metal seen as an economic
bellwether, fell almost 2 percent as investors worried about
lack of demand from top buyer China. The metal, used in power
to construction, fell over 7 cents a pound to hover at around
$4.27 in benchmark U.S. futures trade