GLOBAL MARKETS-Oil gains as Russia set to meet with producers; stock markets up

* Wall Street gains as rate-increase expectations ease

* Gold (Other OTC: GDCWF - news) turns up

* Oil up as Russia willing to meet other producers (Updates market trading, adds U.S (Other OTC: UBGXF - news) . sectoral moves)

By Caroline Valetkevitch

NEW YORK, Oct (HKSE: 3366-OL.HK - news) 5 (Reuters) - Oil prices jumped after Russia said it was ready to meet with other producers to discuss the market, while world stock markets gained, led by energy and mining shares on the oil surge amid a backdrop of continuing low global interest rates.

Wall Street continued a rally from Friday, helped by increases of more than 2 percent in S&P's energy and materials indexes.

The S&P health index was the only sector in the red, dropping 0.6 percent amid a fall in biotechs after 12 nations reached a deal to set up a free-trade zone for two-fifths of the world's economy.

The pact between the United States and other Pacific Rim countries falls short on what health industry groups were expecting on patent protection for drugs.

News (Other OTC: NWSAL - news) that Nelson Peltz's Trian Fund Management disclosed a roughly 1 percent stake worth $2.5 billion in GE lifted GE's stock 4.1 percent to $26.52.

An outlook over the next months for continuing low rates, likely to keep corporate spending and profits buoyant, also kept equity markets aloft in the U.S., Asia and Europe.

"The market is essentially shifting to an ever-longer horizon on the possibility of the Fed hiking (rates)," said Sebastien Galy, currency strategist at Deutsche Bank (Other OTC: DBAGF - news) in New (KOSDAQ: 160550.KQ - news) York.

RUSSIA

Oil prices climbed after the news on Russia, with Brent rising 2.7 percent to a high of $49.43 a barrel before easing back to around $49.33, up $1.20. U.S. crude was $1.10 higher at $46.64 a barrel.

Russia, one of the world's top three oil producers, said it was prepared to meet OPEC and non-OPEC oil producers to discuss the market if such a meeting is called. Moscow had been unwilling in the past to cut its oil output to support prices.

The U.S. dollar rose against the safe-haven Japanese yen and Swiss franc on renewed risk appetite in the wake of a disappointing U.S. jobs report.

Data on Friday showing a stumble in U.S. jobs growth has led traders to expect that the Federal Reserve will delay its first rate hike since 2006 to early next year. While those expectations have kept the dollar from gaining against the euro, they have helped the dollar gain against safe-haven currencies.

The dollar was last up 0.3 percent against the yen at 120.265 yen.

The Dow Jones industrial average rose 216.77 points, or 1.32 percent, to 16,689.14, the S&P 500 gained 25.76 points, or 1.32 percent, to 1,977.12 and the Nasdaq Composite added 44.97 points, or 0.96 percent, to 4,752.74.

Before Friday's jobs data, the Fed had been widely expected to raise U.S. interest rates by year-end. It (Other OTC: ITGL - news) decided not to change its policy path in September because of anxiety over slowing growth in the world No. 2 economy, China, and the potential impact of that on global markets.

European stocks surged, with the FTSEuroFirst 300 index in Europe up 3 percent. Data showing euro zone business activity grew at its weakest pace in four months during September reinforced expectations monetary policy backdrop will remain equity-friendly.

MSCI (NYSE: MSCI - news) 's all-country world index was up 1.6 percent.

ASIA, BONDS

Japan's Nikkei ended the day up 1.6 percent, while Chinese markets were closed for a holiday.

Analysts said the Bank of Japan could ease policy as soon as this week, though action at its Oct. 30 meeting may be more likely.

In the bond market, U.S. Treasuries prices trimmed losses as a steeper-than-forecast drop in a private index on U.S. services sector activity in September revived bets a Fed rate hike will be unlikely in the near term.

The Institute for Supply Management said its gauge on U.S. services industries fell to its lowest level since June.

Benchmark 10-year Treasuries notes fell 8/32 in price for a yield of 2.017 percent, up 3 basis points from late Friday. The 10-year yield touched 1.904 percent on Friday, its lowest level since late April (LSE: 0N69.L - news) , according to Reuters data.

Gold edged higher as the dollar weakened after the weak U.S. jobs report delayed expectations of a rate rise in the near term. Spot gold, was up 0.2 percent at $1,139.81 an ounce. (Additional reporting by Nigel Stephenson in London; Lisa Twaronite in Tokyo, Meeyoung Cho in Seoul, Marius Zaharia and Anirban Nag in London; Editing by Bernadette Baum)