* World stocks gain more than 2 percent
* Europe up 3.5 percent, Japan up 4.4 percent
* G20 close to giving IMF a boost
* ECB set to cut interest rates
* Wall Street set for upbeat start
By Jeremy Gaunt, European Investment Correspondent
LONDON, April 2 (Reuters) - World stocks powered higher on
Thursday as G20 leaders prepared to boost the International
Monetary Fund's finances and more signs appeared that the world
economy could be recovering.
The European Central Bank was also set to cut interest rates
in another move to stimulate growth.
"Market participants are becoming more convinced of a global
recovery and that is causing risk appetite to increase," said
Toru Umemoto, chief FX strategist Japan at Barclays Capital.
MSCI's all-country world stock index, a leading benchmark
for global equities, was up 2.3 percent for a roughly 22 percent
gain since early March.
It was being driven higher by strong gains in Europe that
followed a jump in Asia. Wall Street also looked set for a surge
at the open.
The FTSEurofirst 300 <> index of top European shares
was up 3.2 percent, on track for its third straight day of
gains, helped by better-than-feared U.S. home sales and factory
data.
New car registrations in Germany, Europe's biggest auto
market, also leapt 40 percent in March as government incentives
kicked in.
Earlier, Japan's Nikkei average <> gained 4.4 percent,
with volume jumping to a four-month high.
G20 leaders looked set to triple the war chest of the
International Monetary Fund to fight the economic crisis,
according to sources at the summit. []
They said said the latest draft summit communique provided
for a $500 billion boost to the IMF's resources, raising to $750
billion the funds it can make available to countries worst hit
by the global crisis.
The ECB was also widely expected to cut interest rates by 50
basis points to 1.0 percent. Focus is also on whether the bank
will announce any unconventional policy measures.
WEAKER DOLLAR
The dollar extended losses against a basket of currencies,
allowing the euro to rise while the yen approached the 100 mark
after the likely IMF funding move was known.
The dollar index <.DXY> fell 0.6 percent to 84.919 while the
euro extended gains, rising around 0.9 percent to $1.3350
<EUR=>.
Yen weakness pushed the dollar up to 99.90 yen <JPY=>, its
highest since last November, before recovering a bit.
"People are generally putting on risk today. It seems the
IMF news and what is anticipated from the G20 is all positive,"
a London-based trader said.
On euro zone government bond markets, the two-year Schatz,
which is sensitive to shifts in interest rate expectations,
yielded 1.27 percent <EU2YT=RR>, six basis points more than in
late Wednesday trade.
The 10-year Bund yield was four basis points up at 3.032
percent <EU10YT=RR>.
(Additional reporting by Charlotte Cooper in Tokyo, and Brian
Gorman and Tamawa Desai in London)
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