GLOBAL MARKETS-Deutsche helps lift European stocks before Yellen, Draghi

* Deutsche up 3 percent, lifts European shares after Asia fall

* Oil up on U.S. inventories data, eyes on Algiers talks

* Dollar pushes higher versus major peers

* Fed chief Yellen, ECB President Draghi speaking later

By Nigel Stephenson

LONDON, Sept 28 (Reuters) - A recovery in Deutsche Bank (LSE: 0H7D.L - news) shares helped push European stocks higher on Wednesday, easing concerns over Germany's financial sector that had hit equities in Asia and drove investors into safe-haven government bonds and the dollar.

Beyond banking sector worries, markets were looking ahead to separate appearances by U.S. Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi as well as a meeting of oil producers in Algiers.

Reflecting investor caution, Wall Street looked set to open around flat. S&P 500 e-mini futures were flat while equivalents on the Dow Jones were up less than 0.1 percent.

However, after a torrid couple of days, there was some good news for holders of shares in Deutsche Bank.

Germany's biggest lender said it sold its British insurance business Abbey Life to Phoenix Group (Shanghai: 600679.SS - news) for 935 billion pounds ($1.2 billion).

And Deutsche Chief Executive John Cryan told German daily Bild he had not sought state aid after a report the lender had asked for help to deal with a $14 billion demand from the U.S. Department of Justice over claims it mis-sold mortgage-backed securities.

Deutsche shares were last up 2.7 percent, having hit a record low on Tuesday and lost about half their value this year.

This helped push the pan-European STOXX 600 index up 0.9 percent, with an index of banks up 1.3 percent.

For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets

German two-year government bonds, however, held near Tuesday's record low of minus 0.711 percent and last traded just above minus 0.7 percent. Germany sold a tranche of the bonds at a record low yield at auction of minus 0.7 percent.

Asian shares spent much of the trading session in negative territory, on investor concern about the state of the European banking sector and lower oil prices.

MSCI (NYSE: MSCI - news) 's broadest index of Asia-Pacific shares outside Japan moved in and out of negative territory and last stood less than 0.1 percent higher on the day.

Japanese shares fell, with the Nikkei 225 index falling 1.3 percent by the close.

Oil prices were slightly higher, partially reversing Tuesday's fall of some 3 percent on diminished expectations that oil producers meeting in Algiers this week would reach an agreement to ease a global glut of crude.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are due to meet at 1400 GMT. Some in the market say the Algiers talks could lay the groundwork for an agreement at OPEC's formal policy meeting in Vienna on Nov. 30, said Vyanne Lai, oil analyst at National Australia Bank in Melbourne.

"I think OPEC producers realise they can't continue to expand production indefinitely - OPEC producers are close to maximum capacity - so there could be room for a deal (in November)," Lai said.

Brent crude, the international benchmark, last traded at $46.51 a barrel, up 54 cents on the day on data showing a surprise drawdown in U.S. inventories.

YELLEN SPEAKS

The dollar < was up 0.1 percent against a basket of currencies. Fed chief Yellen testifies before the House Financial Services Committee on regulation but may face questions on the interest rate outlook and the economy.

The Fed left rates on hold last week but strongly signalled they could rise in December.

ECB head Draghi speaks in Berlin.

The euro was flat at $1.1210.

"While we admit that near-term downside risks to the euro have increased due to financial stability concerns we think that any setback into the $1.11 handle offers a buying opportunity," Hans Redeker, head of currency strategy at Morgan Stanley (Xetra: 885836 - news) said.

The yen weakened 0.2 percent to 100.65 per dollar and sterling dipped 0.1 percent to $1.3014. (Additional reporting by Shinichi Saoshiro in Tokyo, Keith Wallis in Singapore, Anirban Nag in London; Editing by Hugh Lawson (Other OTC: LWSOF - news) )