GLOBAL MARKETS-Some calm returns after steep losses, rate cuts

By Jeremy Gaunt, European Investment Correspondent

LONDON, Oct 9 (Reuters) - Many stock markets rose strongly on Thursday and winners during the recent turmoil, such as the yen and gold, slipped as at least temporary calm returned to markets a day after coordinated global interest rate cuts.

European shares were 2.3 percent higher. Emerging market shares as measured by MSCI .MSCIEF were up 2.6 percent, primarily reflecting gains in Asia.

Demand for government bonds, gold and low-yielding currencies -- all recent beneficiaries of investors searching for relative safety -- fell.

The direction of the moves was the mirror of what happened on Wednesday and earlier in the week, but nowhere near matched the degree.

MSCI's main world stock index .MIWD00000PUS, for example, was up 1 percent. But it lost 3.9 percent on Wednesday, 3.0 percent on Tuesday and 6.1 percent on Monday.

Thursday's relative calm followed an unprecedented display of international coordination on Wednesday when the U.S. Federal Reserve and central banks from Europe, Canada and China executed emergency rate cuts in the face of amid plunging global equity markets and the worst financial crisis in some 80 years.

"Markets are not turning positive, they are recovering from heavy losses that we saw earlier this week. The sentiment has not really improved," said Rik Zwaneveld, trader at AFS Brokers, in Amsterdam.

"The rate cuts are a good step in the right direction to stop the bleeding, but this won't be enough."

Echoing this, Japan's Nikkei .N225 closed down, finishing 0.5 percent lower in a choppy session and down for a sixth straight day for its lowest close since June 2003.

Wall Street also closed lower overnight, although early indications from stocks index futures suggested there would be gains on Thursday.

BACK FROM THE BRINK

Steadying stocks markets weakened demand for relatively safer assets.

Spot gold was down 2 percent at $888.75 an ounce having gained around 8.5 percent in the week to late Wednesday.

Japan's yen fell. The dollar rose 1.6 percent from late U.S. trade to 100.80 yen , rebounding from a six-month low of 98.60 yen hit on trading platform EBS on Wednesday.

The euro also recovered against the yen, up 2.3 percent at 138.32 yen , after falling to a three-year low of 134.15 yen on Wednesday.

"At least some kind of confidence has come back to the market and is supporting high-yielders and putting pressure on the yen, said Antje Praefcke, currency strategist at Commerzbank.

Euro zone government bond prices also fell.

Two-year Schatz yields were up 4 basis piints at 3.104 percent, while 10-year Bund yielded 3.878 percent, up 7 basis points. (Additional reporting by Jessica Mortimer and Blaise Robinson, editing by Mike Peacock)