GLOBAL MARKETS-Euro trims losses on BoE, ECB; shares down

* MSCI world equity index down 0.7 percent

* Euro, sterling trim losses on BoE, ECB cuts

* European shares rise briefly, then dragged lower by U.S.

By Carolyn Cohn

LONDON, Dec 4 (Reuters) - Sterling and the euro trimmed losses but European shares reversed initial gains after the Bank of England (BoE) and the European Central Bank (ECB) cut interest rates on Thursday to kickstart recession-hit economies.

The BoE cut rates by 100 basis points to 2 percent and the ECB by 75 bps to 2.5 percent, the biggest cut in the euro zone central bank's existence. Markets had started to position for large rate moves after hefty cuts of 150 basis points from New Zealand and 175 bps from Sweden earlier in the session.

"The central banks are responding with considerable verve. They recognise the urgency with which they have to cut rates," said Mike Lenhoff, chief strategist at Brewin Dolphin.

The euro was down 0.63 percent on the day at $1.2633 EUR= but off the day's lows.

Sterling was down 0.91 percent at $1.4640 GBP= and 0.3 percent against the euro at 86.25 pence EURGBP=, off 6-3/4 year lows against the dollar and record lows against the euro hit earlier on Thursday.

The FTSEurofirst 300 index of leading European shares .FTEU3 initially rose, but quickly reversed those gains in line with falling U.S. futures, following disappointing news from U.S. companies DuPont (DD.N) and Merck (MRK.N).

The MSCI world equity index .MIWD00000PUS fell 0.7 percent on the day.

NERVES REMAIN

While actions taken by central banks and governments help the economy, investors remain nervous that major economies -- most of them already in recession -- are deteriorating rapidly.

Such concerns have pushed oil, which is sensitive to global growth, below $46 a barrel CLc1 to its lowest in nearly four years.