GLOBAL-MARKETS-Equities rally, pound jumps on upbeat geopolitical news

* All three major U.S. stock indexes in the black
* European, emerging equities markets rally
* Pound up 1% after PM Johnson's setback in parliament
* Hong Kong scraps extradition bill, boosting sentiment

(Updates to U.S. market open, changes dateline (previously
MILAN), byline)
By Stephen Culp
NEW YORK, Sept 4 (Reuters) - Stock indexes worldwide
rebounded on Wednesday, and the euro and pound sterling bounced
back as easing geopolitical concerns and upbeat economic data
from China brought buyers back to the equities market.
A parliamentary vote in Britain raised hopes that the
nation's no-deal exit from the European Union could be
postponed, Hong Kong withdrew the contentious extradition bill
at the heart of recent protests and political risks in Italy
appeared to be easing, all of which helped revive investor risk
appetite. China's services sector expanded in August at its fastest
pace in three months as a jump in new orders prompted the
biggest hiring increase in over a year, according to the
Caixin/Markit services purchasing managers index (PMI).

"Markets like the Brexit and Hong Kong news, but we think
this is just a short term headline and the problems are likely
to re-emerge," said David Carter, chief investment officer at
Lenox Wealth Advisors in New York. "Let's not pop the champagne
because we had one good day of geopolitical headlines."
The U.S. trade deficit shrank in July, according to the
Commerce Department, but bilateral gaps in goods trade with key
trading partners widened. The closely watched deficit with China
grew by 9.4% as the bruising Sino-U.S. trade war rages on and
deficit with the European Union rose to a record high.

The Dow Jones Industrial Average .DJI rose 167.9 points,
or 0.64%, to 26,285.92, the S&P 500 .SPX gained 18.91 points,
or 0.65%, to 2,925.18 and the Nasdaq Composite .IXIC added
64.05 points, or 0.81%, to 7,938.21.
The political developments in Europe and Hong Kong helped
fuel a rally in European stocks, sending them to one-month
highs. The pan-European STOXX 600 index .STOXX rose 0.82% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.92%.
Emerging markets equities were led higher by Hong Kong
stocks on reports that the government might scrap its
controversial extradition bill. Emerging market stocks rose 1.81%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 1.83%
higher, while Japan's Nikkei .N225 rose 0.12%.
U.S. Treasuries were essentially flat but the yield curve
steepened slightly as longer-dated yields edged higher on
calming geopolitical concerns.
Benchmark 10-year notes US10YT=RR last fell 4/32 in price
to yield 1.4775%, from 1.466% late on Tuesday.
The 30-year bond US30YT=RR last fell 20/32 in price to
yield 1.9759%, from 1.95% late on Tuesday.
Fresh doubts about the scale of the European Central Bank's
stimulus package caused the Euro to rebound, while the dollar
continued its retreat from a more than two-year high against a
basket of major world currencies. The pound sterling recovered
as efforts to stop a no-deal Brexit advanced. The dollar index .DXY fell 0.44%, with the euro EUR= up
0.44% to $1.102.
The Japanese yen weakened 0.21% versus the greenback at
106.18 per dollar, while sterling GBP= was last trading at
$1.2188, up 0.86% on the day.
Oil prices rose with the tide, boosted by easing
geopolitical tensions and the positive news about China's
services sector. U.S. crude CLcv1 rose 3.39% to $55.77 per barrel and Brent
LCOcv1 was last at $60.13, up 3.21% on the day.
Gold dipped on receding global political risks, but
remaining economic concerns in the shadow of the U.S.-China
trade war kept the precious metal near a six-year peak.
Spot gold XAU= fell 0.03% to $1,546.13 an ounce.
Copper CMCU3 rose 2.42% to $5,745.50 a tonne.
Three-month aluminum on the London Metal Exchange CMAL3
rose 1.20% to $1,774.00 a tonne.