GLOBAL MARKETS-Stocks, dollar gain as payrolls fuel risk-on trades

* Friday's strong U.S (Other OTC: UBGXF - news) . data drives broad equity rally

* Bank sector bounce underpins European gains

* Yen, gold under pressure

By Sudip Kar-Gupta

LONDON, Aug 8 (Reuters) - Stock markets rose on Monday and the dollar extended gains as risk appetite revived following strong U.S. job figures that bolstered expectations of faster growth in the world's biggest economy.

The MSCI All-Country World index rose 0.4 percent, as did the pan-European STOXX 600 index, supported by a broad equity rally on Friday's payrolls data and as Europe's under-pressure banks extended gains from post stress-test lows.

The dollar edged up against a basket of six major currencies , while euro zone bond yields climbed as the U.S. numbers also drove a sell-off in fixed income markets.

Yukio Ishizuki, currency strategist at Daiwa Securities (Frankfurt: 857092 - news) , said the robust signals from the U.S. economy were driving investors away from safe-haven assets such as the yen.

"The payrolls data puts markets on risk-on mode, making it difficult to buy the yen for now," said Ishizuki.

Gold (Other OTC: GDCWF - news) prices also slipped, hitting a one-week low.

With (Other OTC: WWTH - news) stocks back in fashion, Andreas Clenow, chief investment officer at ACIES Asset Management in Zurich, said U.S. equity markets were the preferred choice for many.

"The U.S. markets look pretty healthy. We keeping making record highs in the U.S, but the European stock markets look much more sluggish," he said.

The MSCI Emerging Market index advanced 1 percent.

Oil prices rose, lifted by reports of renewed talks among some OPEC state to rein in output, a proposal that non-OPEC producer Russia was quick to dismiss. (Additional reporting by Saikat Chatterjee in Hong Kong and Dhara Ranasinghe in London; editing by John Stonestreet)