* Equities up sharply on hopes from stimulus plans * Wall Street set for positive start * Dollar slides against euro but gains on yen * Bond yields jump By Jeremy Gaunt, European Investment Correspondent LONDON, Dec 8 (Reuters) - Equities surged around the world on Monday with investors taking heart from a likely rescue plan for U.S. automakers, a proposed U.S. jobs plan and more government stimulus measures to reverse economic decline. Wall Street also looked set for a positive start. The dollar fell against other major currencies apart from the yen while demand for government bonds dropped. European shares jumped, led by banks and oils, tracking gains in the United States and Asia. The FTSEurofirst 300 index of top European shares traded 5.3 percent higher. Earlier, Japan's Nikkei .N225 climbed 5.2 percent to its highest close in a week. U.S. president-elect Barack Obama said on Saturday that his plan to create at least 2.5 million new jobs included the largest infrastructure investment since the 1950s and a huge effort to reduce U.S. government energy use. Lawmakers in the U.S. Congress are also working on draft legislation to help out the embattled auto industry. "The central banks have done their job and now the focus is on governments -- in addition to Obama's plan we have stimulus packages from India, Australia and China," said Thierry Lacraz, strategist at Pictet in Geneva. "While this will not avoid a recession, investors at least have the feeling that the people in charge are doing the right thing." Global stocks as measured by MSCI .MIWD00000PUS were up around three percent. For the year to date, however, they remain down more than 46 percent.

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