World stocks soared Thursday as leaders of the world's 20 top rich and developing countries announced in London a raft of measures to deal with the economic crisis that exceeded expectations.
Half an hour before European markets closed, British Prime Minister Gordon Brown said the G-20 summit had agreed to give $1 trillion to restore credit, growth and jobs in the world economy and boost the coffers of the International Monetary Fund and the World Bank.
Britain's FTSE 100 closed up 4.3 percent to 4,124.97, Germany's DAX swelled 6.1 percent to 4,381.92 and France's CAC 40 jumped 5.4 percent to 2,992.06.
The Group of 20 nations also agreed to renounce protectionism and pledged $250 billion in trade finance over the next two years _ a key measure to help struggling developing countries, whom they promised to give a greater say in world economic affairs.
Brown, who hosted the emergency summit, said the 20 countries at the summit will enact common policies to crack down on tax havens, regulate hedge funds, and rebuild trust in the financial system to "prevent a crisis such as this from happening again."
Tullia Bucco, an economist at UniCredit bank in Milan, said the summit's agreement on increasing IMF funding and measures to boost trade finance "is really good news."
However, Bucco said "we remain a bit skeptical that the amounts channeled through international institutions will be enough to leverage the recent glimmers of hope in the economy."
"It's encouraging, but it probably won't be enough to rekindle global growth," Bucco said. "It could help lift business sentiment, though."
Wall Street also surged ahead, helped by the announcement that certain accounting rules will be relaxed, helping banks reduce losses. Statistics also showed factory orders rose strongly in February.
In midday trading in New York, the Dow Jones Industrial Average rose 3.3 percent to 8,016.16, the Standard & Poor's 500 index added 3.7 percent to 839.12, and the Nasdaq 100 index climbed 3.9 percent to 1,611.58.
Meanwhile, the European Central Bank lowered its benchmark interest rate by a quarter percentage point to a record low of 1.25 percent in an effort to alleviate the economic downturn plaguing the 16 countries that use the euro. ECB President Jean-Claude Trichet said the bank could further reduce rates and would examine alternative measures to stimulate economic activity, but did not break down what those may be or what they could entail.
Markets in Asia and Europe had already marked huge gains ahead of the G-20 announcement following an overnight surge on Wall Street amid tentative signs of stabilization in the hard-hit global economy and banking industry.
In Europe and Asia, financial and auto stocks charged higher after Wednesday's U.S. home sales, manufacturing and auto data suggested the U.S. recession may be moving closer to a bottom.
Car makers Daimler, BMW and Renault jumped 15.6 percent, 14.9 percent, and 14 percent, and tire maker Michelin added 16.6 percent. In Asia, Toyota Motor Corp. and Nissan Motor Co. strengthened 5.5 percent and 14 percent on U.S. auto figures that were less dismal than feared.
Investors were encouraged after U.S. car sales jumped by nearly 25 percent last month from February, beating the typical rise and underpinning hopes of a turnaround in the American auto market. Separate data showed German auto sales soared last month to their highest level since 1992 thanks to a powerful boost from the government's new car-scrapping bonus.
A rebound in pending U.S. home sales in February from a record low, as well as improving manufacturing activity, added to a growing belief the most severe global downturn in decades may be moving close to a bottom.
Still, the upbeat evidence distracted investors from more sobering news that the U.S. private sector continued to shed hundreds of thousands of jobs last month _ a worrisome sign as investors brace for Friday's report on nationwide job cuts.
With the economic crisis still far from over, analysts warned of more painful market volatility as the recession unfolds.
"We're starting to see some initial signs of green shoots. The question is whether or not this is a sound foundation for stability in the economy," said Song Seng Wun, head of research at CIMB-GK in Singapore. "It's still hard to tell."
In Asia, Japan's Nikkei 225 stock average jumped 4.4 percent to 8,719.78, while Hong Kong's Hang Seng led the region's gains, soaring 7.4 percent to 14,521.97. South Korea's Kospi added 3.5 percent to 1,276.97.
Elsewhere, benchmarks in Australia and Taiwan gained about 3 percent. Singapore jumped 5.3 percent and India's Sensex climbed 4.9 percent.
Oil rose above $52 a barrel in European trading. Benchmark crude for May delivery rose $3.84 to $52.23 a barrel. The contract fell $1.27 on Wednesday to settle at $48.39.
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AP business writers Greg Keller in Paris, Madlen Read in New York and Jeremiah Marquez in Hong Kong contributed to this report.
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