Monday September 7, 02:00 PM

GLOBAL MARKETS - Equities jump after G20, U.S. jobs data

By Jeremy Gaunt and Harpreet Bhal

LONDON (Reuters) - Investors jumped back into equities on Monday, sending stocks up more than 1 percent, after a rare week of losses, while the dollar weakened and gold was steady at just below $1,000 an ounce.

U.S. jobs data and a weekend agreement by the G20 to keep economic stimuli running were generally supportive of riskier assets. Short-tern euro zone government debt yields hit historic lows on expectations of continued low interest rates.

Wall Street is closed for the Labor Day holiday.

MSCI's all-country world stocks index, a benchmark for professional investors, was up around three quarters of a percent and only a few points off a year high reached in late August.

The index's emerging market counterpart gained more than 1 percent and other major index were solidly higher.

Japan's Nikkei closed up 1.3 percent and the pan-European FTSEurofirst 300 was up 1.1 percent.

"We are quite optimistic for the short term because everything is there in order to manage the uptrend," said Romain Boscher, head of equity management at Groupama Asset Management.

The Group of 20 finance ministers and central bankers said over the weekend they would not remove economic stimulus until the global recovery was well entrenched.

U.S. jobs data on Friday was mixed, but showed smaller-than-expected job losses.

Notwithstanding Monday's gains, equity markets have been pulling back somewhat from the sharp rally that began in March. The world index lost nearly 1.5 percent last week, the first decline in eight week and only the fifth since the rally began.

Some degree of risk aversion -- and a weaker dollar -- was evident on the gold market.

Spot gold gained 4 percent last week and is currently trading around $994 an ounce.

HISTORIC LOWS

Two-year euro zone government bond yields slipped to historic lows as investors took the meeting of global finance chiefs to mean interest rates will stay low for longer than some had expected.

The two-year Schatz yield briefly slipped to a euro lifetime low of 1.075 percent before moving to 1.10 percent. The 10-year yield was up three basis points at 3.29 percent.

The dollar and yen were generally weaker with the former down a quarter of a percent against a basket of major currencies.

The Australian dollar hit its strongest level againt teh dollar in a year as shares gained after a G20 pledge to keep economic stimulus packages in place.

"The G20 was positive for risk appetite, you can see that from the yen and dollar's performance. At the same time people are still a bit cautious as we are approaching the end of this policy cycle," said Geoffrey Yu, a currency strategist at UBS.

Against the yen, the dollar rose to 93.13 yen, up 0.2 percent from late U.S. trading on Friday.

The euro gained 0.4 percent to $1.4344, near a one week high but still below August's eight-month high at $1.4448.

(Additional reporting by Atul Prakash and Emelia Sithole-Mataraise)

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