December 8, 2008 (CNN) -- The major European stock markets traded higher on Monday after a similar rally in Asia-Pacific trading, with gains attributed to hopes for new U.S. economic stimulus efforts.

U.S. stocks were also set to open sharply higher Monday, lifted by President-elect Barack Obama's plan to boost the economy and signs that Detroit 's automakers would stay out of bankruptcy.

"The market now is rallying on hopes that we can begin to stave off massive layoffs in the auto industry," Peter Cardillo, analyst for Avalon Partners, told CNNMoney.com.

By 1320 GMT the French CAC and Germany 's DAX indexes were both up by more than 6 percent while London 's FTSE was 5 percent higher.

The European rally followed a widespread spike in Asian and Pacific stocks.

Australia's All Ordinaries index closed up 3.69 percent, while Tokyo 's Nikkei jumped 4.99 percent.

In South Korea , Seoul 's KOSPI was up 7.48 percent, while the Hang Seng index in Hong Kong closed up 8.15 percent.

Investors in the U.S. were hoping to build on Friday's stock market rally which happened despite the Labor Department's worst monthly job report in 34 years, showing a loss of 533,000 jobs in November and bringing the total to 1.9 million lost jobs so far this year.

"You can't lose jobs at this rate for very long," said Robert Brusca, chief economist at Fact and Opinion Economics. "At this point, you have to become an optimist, or you have to become a super pessimist and say that were headed for a Great Depression."

Obama told NBC's "Meet the Press" over the weekend that his incoming administration would be looking for spending projects that would provide "the most bang for the buck" to stimulate the economy.