* European stocks set for best day in nearly two months * NASDAQ futures edge up after selloff in high caps * Dollar hits highest level in over two weeks * Oil nears $70 a barrel LONDON, May 5 (Reuters) - Global shares edged up on Wednesday as U.S. stock futures steadied after a pullback in tech darlings while European markets were buoyed by accelerating business activity and positive earnings. The Euro STOXX index added 1.3% as it headed for its best day in nearly two months, helped by data showing euro zone business activity quickened last month, while the services industry returned to growth. Top performers included Germany’s Rational and Merck after well-received numbers. The MSCI world equity index, which tracks shares in 49 countries, was trading 0.2% higher after a sell-off on Tuesday from near record highs. It wasn’t all rosy, however. MSCI’s broadest index of Asia-Pacific shares outside Japan sank 0.3% for its fourth consecutive day of losses, although Asian trading was thin due to holidays in Japan, China and South Korea. India’s Nifty 50 was 0.8% higher, its best day in a week, as the central bank rolled out a series of measures to support the coronavirus-ravaged economy, including allowing certain small borrowers more time to repay loans. Nasdaq futures were up 0.6% after a sharp fall overnight, while S&P 500 futures also added 0.4%. The Nasdaq had dropped 1.9% on Tuesday as some big tech names ran into profit-taking, including Microsoft Corp, Alphabet Inc, Apple Inc and Amazon.com Inc . “(The) ‘sell in May and go away’ adage has some truth in it. We’re a bit cautious in the short-term, expecting a 5% to 10% pullback in equities,” said Grace Peters, investment strategist at JPMorgan Private Bank. “I guess we’re in for a consolidation during the summer months. Lack of follow-through in stock markets after an absolutely stellar earnings is also a signal of caution.” Clients were net sellers of U.S. equities for a third week in a row last week, with $2.2 billion dumped, as the market reached another record high and sentiment towards equities became increasingly euphoric, BofA said in a note. Stretched valuations were tested when U.S. Treasury Secretary Janet Yellen said rate hikes may be needed to stop the economy overheating. She later walked back the comments, but it reminded investors that rates would have to rise at some point in the future. “Some of her comments were seemingly misinterpreted by markets as her suggesting the Fed would need to hike,” said James Athey, investment director at Aberdeen Standard Investments. “This market really is just as febrile and fragile as that.” The next focal point for markets looms on Friday when U.S. payrolls data are forecast to show a hefty rise of 978,000, while some estimates go as high as 2.1 million. So far, Federal Reserve Chair Jerome Powell has argued the labour market is still far short of where it needs to be to start talking of tapering asset buying. Minneapolis Fed Bank President Neel Kashkari, a notable dove, said on Tuesday it may take a few years for the economy to get back to full employment. The Fed’s dogged patience allowed yields on U.S. 10-year notes to ease back to 1.59%, from last week’s top of 1.69%, though they later crept up to 1.61%. In Europe, Germany’s 10-year yield, the benchmark for the region, was up at -0.22%, although below its highest since March 2020 hit on Monday. Just the mention of higher U.S. rates was enough to help the dollar recoup a little of its recent losses. Against a basket of currencies, the dollar touched a two-week high of 91.436, its highest since April 19. That pressured the euro, which dropped once again below the $1.20 mark. The greenback last traded flat to the yen at 109.29. The New Zealand dollar blipped higher to $0.7192 when local jobs data proved stronger than expected. In commodity markets, palladium rose 0.6% to $3,002, near to the record high touched on Tuesday on worries over short supplies of the metal used in emissions-controlling devices in automobiles. Gold was left lagging at $1,777 an ounce. Oil prices climbed to multi-week peaks as more countries opened their borders to travellers, improving the demand outlook for petrol and jet fuel. Brent added 1.2% to $69.68 a barrel, near its highest since mid-March, while U.S. crude rose 1.1% to $66.41 per barrel, having earlier climbed to the most since March 8. Reporting by Tom Arnold in London and Wayne Cole in Sydney; Editing by Kim Coghill and Mark Heinrich Our Standards: The Thomson Reuters Trust Principles.