* World stocks gain more than 2 percent
* Europe up 3 percent, Japan up 4.4 percent
* G20 close to giving IMF a boost
* ECB cuts interest rates less than expected
* 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, however, surprised markets by
cutting interest rates by only 25 basis points, not 50 as
expected.
It had little impact on equities but boosted the euro
MSCI's all-country world stock index <.MIWD00000PUS>, a
leading benchmark for global equities, was up 2.2 percent for a
roughly 22 percent gain since early March.
"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.
The index 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 2.9 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 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.
ECB SUPRISES
The euro jumped and euro zone government debt extended
losses after the ECB cut its refinancing rate by half as much as
expected to 1.25 percent.
"The ECB has surprised the market and the big question now
is if they are slowing the pace of traditional front will they
step things up on the unconventional front?" BNP Paribas
currency analyst Ian Stannard said.
The euro was up more than 1 percent on the day at $1.3369
from $1.3333 just before the rate verdict <EUR=>.
Euro zone government bonds extended losses, with the
two-year yield rising to its highest in almost a week after the
ECB move.
Two-year yields rose as high as 1.395 percent and were last
12 basis points higher at 1.356 percent <EU2YT=RR>.
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