GLOBAL MARKETS-World stocks drift as wary investors expect grim U.S. jobs data

* European stocks gain energy from oil prices

* U.S. jobless claims due at 1230 GMT, seen hitting new high

* World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Tom Arnold

LONDON, April 2 (Reuters) - World stocks were pinned down on
Thursday by the rising death toll from the new coronavirus and
deepening economic pain, with another record week of jobless
claims expected in the United States.

Investors sought the safety of the U.S. dollar which hung on
to recent gains, while oil futures surged after U.S. President
Donald Trump said he expected Saudi Arabia and Russia to reach a
deal soon to end their oil price war.

In Japan, the Nikkei index ended down 1.37%, taking
its losses to 25% so far this year. In a meandering session,
European stocks made tentative gains, with the pan-European
STOXX 600 gaining 0.4%. Wall Street futures
added 2% after plunging overnight.

"U.S. jobless claims are expected to surge again and in this
environment we cannot talk about a recovery in equities in the
short term. The best you can hope for is stablisation in the
current environment," said Francois Savary, chief investment
officer at Swiss wealth manager Prime Partners.

In Europe, oil and gas stocks gained more than 5%, with
Royal Dutch Shell, Total SA and BP
jumping between 3.3% and 5.0%, thanks to the rise in oil prices.

Brent crude futures rose 11.36%, or $2.81, to
$27.55, while U.S. West Texas Intermediate (WTI) crude
futures increased 10.0% or $2.03, at $22.34.

Trump said he had talked recently with the leaders of both
Russia and Saudi Arabia and believed the two countries would
make a deal within a "few days" to lower production and thereby
bring prices back up.

Shares in British Airways owner IAG added 1.5%
after a person familiar with the matter said British Airways was
in talks with its union about a plan to suspend around 32,000
staff so it can survive the coronavirus pandemic.

Euro zone government bond yields rose as investors
cautiously moved back into riskier assets. The 10-year German
government bond yield rose 3 basis points to -0.44%,
rising away from the lows of -0.55% touched on Monday.

The yield on safe-haven 10-year U.S. Treasuries - which
falls when prices rise - fell as far as 0.5680%.

"There had been fears about the bond market blowing up, but
for the time being there's a return to normal correleation in
the market, so we don't see a vicious cycle where bonds bring
down equities and equities brings down bonds," said Savary.

U.S. labour market data will likely provide the next test of
market sentiment and of the pain in the world's largest economy.

Initial claims for jobless benefits last week probably broke
the week-ago record of 3.3 million, with 3.5 million expected,
according to a Reuters survey of economists.

“We think last week’s print of just under 3.5 million is
ripe for a dramatic upward revision,” said RBC Capital Markets’
chief U.S. economist, Tom Porcelli.

“This week we look for another sizeable 4 million increase.”

DIFFICULT DAYS

China and South Korea have shown signs of controlling the
virus, reporting falling numbers of new cases, but progress
remains fragile and infections are soaring globally.

The World Health Organization said the global case count
would reach 1 million and the death toll 50,000 in the next few
days. It currently stands at 46,906.

U.S President Donald Trump, who had initially played down
the outbreak, told reporters at the White House on Wednesday
that he is considering a plan to halt flights to coronavirus hot
zones in the United States.

“Difficult days are ahead for our nation,” Trump said.

In currency markets, the dollar gave up some of its recent
gains, with oil's gains lifting some commodity-linked
currencies.

The Australian dollar gained 0.6% to $0.6110 and
the Canadian dollar firmed 0.65% to C$1.4146.

The dollar index against a basket of six major currencies
stood flat at 99.470 after a gain of 0.53% overnight as
the U.S. currency advanced against most of its major peers. The
euro traded down 0.3% at $1.0934 as the dollar advanced.

The South African rand hit a fresh low while the Turkish
lira touched a two-year low.

Spot gold fell 0.3% to $1,586.24 per ounce.

(Additional reporting by Tom Westbrook; editing by Philippa
Fletcher)