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G20 hopes boost Europe stocks; banks, autos gain

* FTSEurofirst 300 ends up 4.9 pct * Banks gain on mark-to-market accounting rules change * Car makers up as auto sales rise By Joanne Frearson

LONDON, April 2 (Reuters) - European shares ended higher for a third straight session on Thursday, lifted by hopes the G20 meeting will help defuse the economic crisis and a change in mark-to-market rules in the United States would help banks.

The pan-European FTSEurofirst 300 .FTEU3 index of top shares ended up 4.9 percent 781.48 points. The index is still down nearly 6 percent for the year.

“Clearly, there has been some better data around ... generally there has been positive noises coming out of the G20, and Trichet ... was talking about the likelihood of recovery in 2010,” said Jim Wood-Smith, head of research at brokerage Williams de Broe, referring to European Central Bank President Jean-Claude Trichet.

“Maybe this drip of mixed economic data ... is just convincing people that perhaps we ought to be taking on a bit more risk now,” Wood-Smith said.

At the G20 summit, world leaders agreed a trillion-dollar deal to combat the deepest economic downturn since the Great Depression, tripling the war chest of the IMF. [ID:nN02286809]

They also signed off on plans to commission blacklists of tax havens and tighten financial rules to bring hedge funds and credit rating agencies under closer supervision.

Banks were among the major gainers, tracking U.S. peers after the U.S. Financial Accounting Standards Board said new mark-to-market accounting rules will be effective for the second quarter, but early adoption would be allowed for most companies’ first quarter. [ID:nN02355900]

Supporters of the changes argue mark-to-market has forced banks to value assets at fire-sale prices and exacerbated the financial crisis.

HSBC HSBA.L, BNP Paribas BNPP.PA, Banco Santander SAN.MC, Standard Chartered STAN.L were between 9.5 and 15.9 percent higher.

Deutsche Bank DBKGn.DE jumped 14.6 percent after its chief executive said in a Financial Times interview it had solid results in March and does not need any additional capital. [ID:nL1655296]

CAR MAKERS GAIN

Car makers performed well after a drop in U.S. auto sales for March was smaller than expected, while new car registrations in Germany for March leapt 40 percent thanks to government incentives for motorists to junk old cars and buy new models. [ID:nN01293914] [ID:nL2696446]

Daimler DAIGn.DE, BMW BMWG.DE, Porsche PSHG_p.DE and Volkswagen VOWG.DE were up between 4 and 16.6 percent.

Energy stocks ticked up as crude CLc1 rose 7.8 percent. BG Group BG.L, BP BP.L, Royal Dutch Shell RDSa.L and Total TOTF.PA rose 2.5 to 5.3 percent.

Miners were also higher as copper MCU3=LX ticked up 1.9 percent. Anglo American AAL.L, Antofagasta ANTO.L, BHP Billiton BLT.L, Eurasian Natural Resources Corporation ENRC.L, Rio Tinto RIO.L and Xstrata XTA.L rose as much as 15 percent.

Earlier, the European Central Bank surprised financial markets by cutting its main interest rate by a smaller-than-expected 25 basis points, taking it to a new low of 1.25 percent. [ID:nL2118897]

“The only possible explanation ... is its intention to keep the door open for further conventional easing and starting non-conventional easing as early as the next meeting,” said Ashraf Laidi, currency strategist at CMC Markets.

Across Europe, the FTSE 100 .FTSE index was up 4.3 percent, Germany's DAX .GDAXI gained 6.1 percent and France's CAC 40 .FCHI added 5.4 percent. (Editing by David Holmes)

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