LONDON, Sept 7 (Reuters) - European equities extended the previous session's sharp gains on Monday, with the G20's pledge to keep emergency support for their economies in place until a recovery is firmly secured improving investor sentiment.
At 0712 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 percent at 970.25 points after climbing 1.3 percent higher in the previous session. The index, which slumped 45 percent in 2008, is up 17 percent this year and has jumped 50 percent since hitting a record low in early March.
Banks were among top gainers, with Standard Chartered, Barclays, Lloyds, Royal Bank of Scotland and Societe Generale up 0.5-4.1 percent.
"We are quite optimistic for the short term because everything is there in order to manage the uptrend," said Romain Boscher, head of equity management at Groupama Asset Management, adding that interest rates were still very low and the market was witnessing a much more normalised valuation environment.
In a closing statement, the Group of 20 finance ministers and central bankers said over the weekend they would not remove economic stimulus until the global recovery was well entrenched.
British confectionery group Cadbury leapt more than 36 percent after North America's biggest food group Kraft Foods Inc said it had made a $16.7 billion bid for the UK group, which had rejected the approach.
In the food sector, Danone gained 2.6 percent and Unilever rose 2.2 percent.
U.S. markets are closed on Monday for a holiday.
Across Europe, Britain's FTSE 100 index, Germany's DAX and France's CAC 40 were up 0.7 to 0.9 percent. (Reporting by Atul Prakash)