* Wall St ends at record highs as investors await tax bill details
* H&M leads European shares lower after sales miss
* Dollar index firmer on tax bill optimism (Updates to U.S. close, adds commentary)
By Stephanie Kelly
NEW YORK, Dec 15 (Reuters) - Shares gained worldwide on Friday and Wall Street notched closing record highs on U.S. tax legislation optimism, while the U.S. yield curve turned its flattest in a decade after the Federal Reserve hiked interest rates this week.
MSCI's gauge of stocks across the globe gained 0.31 percent after a week of central bank meetings that saw the Fed raise U.S. rates yet leave its rate outlook for the coming years unchanged. The European Central Bank and the Bank of England held off on hikes.
The Dow Jones Industrial Average rose 143.08 points, or 0.58 percent, to end at 24,651.74, the S&P 500 gained 23.8 points, or 0.90 percent, to 2,675.81 and the Nasdaq Composite added 80.06 points, or 1.17 percent, to 6,936.58.
Wall Street equities closed sharply higher as Republican lawmakers prepared to reveal details of their final tax bill, which is expected to cut the corporate tax rate to 21 percent from 35 percent.
"It's meaningful in terms of its impact on shareholders. You're going to see an increase in stock buybacks, maybe some dividend payouts," said David Joy, chief market strategist at Ameriprise Financial in Boston.
Votes on the legislation from the House of Representatives and the Senate are expected next week.
The long-awaited bill has been one of the catalysts for this year's surge in the stock markets.
Europe's STOXX 600 closed down 0.19 percent, as a 12.98 percent slump in fashion giant H&M and a 6.29 percent drop for Italian luxury goods firm Ferragamo spooked retailers.
In addition, worries over political risk spurred profit-taking. According to EPROM's weekly data, worries over the national election next year in Italy hit European equity funds with outflows at their highest in over a year.
Emerging market stocks lost 0.24 percent. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.42 percent.
Japan's Nikkei stock index finished down 0.62 percent at its lowest in more than a week, with mobile firms extending a selloff on concerns of increased competition after e-commerce group Rakuten said it aims to become the country's fourth wireless carrier.
The margin between U.S. shorter-dated and longer-dated Treasury yields contracted to its slimmest in a decade on Friday after the Fed this week upgraded U.S. growth forecasts but left its inflation view unchanged.
"That sparked the extra kicker for curve flatteners the last couple of days," said Thomas Roth, head of U.S. Treasury trading at MUFG Securities Americas in New York. "People are very comfortable with holding long-dated paper."
The yield spread between five-year and 30-year Treasuries was last at 53.5 basis points.
The U.S. dollar strengthened as Republican negotiators put the finishing touches to the tax overhaul bill and expectations rose that the bill would pass by year-end.
The greenback rose and fell throughout the week after news surrounding the central bank policy meetings and tax reform.
News that the European Union had formally agreed to move Brexit talks onto trade and a transition pact triggered a 0.83 percent drop in the pound, as traders cashed in recent gains.
The euro fell 0.21 percent to $1.1752.
U.S. crude oil futures rose 0.56 percent to $57.36 per barrel and Brent was last at $63.25, down 0.09 percent.
Spot gold added 0.2 percent to $1,255.18 an ounce. U.S. gold futures gained 0.10 percent to $1,258.40.
Reporting by Stephanie Kelly in New York; Additional reporting Danilo Masoni in Milan, Julien Ponthus in London, Karen Brettell, Sinead Carew and Richard Leong in New York, Rama Venkat Raman and Sruthi Shankar in Bengaluru; Editing by Nick Zieminski and James Dalgleish