Investors jump into stocks

By Jeremy Gaunt, European Investment Correspondent

LONDON (Reuters) - Global investors jumped into equities for the second day in a row on Tuesday, dumping relatively safer assets as they took comfort from concerted efforts by governments to shore up the financial system.

Much of the trading was unwinding panic moves from last week when fears about the worst financial crisis in nearly 80 years swept across the world.

Wall Street looked set to follow Europe and Asia higher. European shares were up more than 5 percent. Japan's Nikkei, which was not traded on Monday because of a holiday, gained more than 14 percent.

MSCI's main world stock index was up 3.8 percent, gaining more than 12 percent for the week to date after plunging 20 percent last week.

Until this week's rally, the index had lost 47 percent of its value -- more than $20 trillion (11.4 trillion pounds) -- from an all-time high roughly a year ago.

Its emerging market stock counterpart was up 5.4 percent on the day, adding to Monday's 7.4 percent gain.

Investments seen recently as relatively safe compared with stocks -- the Japanese yen and government bonds -- fell.

"The most important thing is to get money markets working again," said Neil Parker, market strategist at Royal Bank of Scotland.