World Stocks Continue Rising on Growth Upgrade

World markets climbed Thursday on hopes that the global economy will recover faster than expected and as investors prepared for a European Central Bank interest rate meeting.

The International Monetary Fund raised its 2010 world growth forecast to 4.6 percent from 4.2 percent in April and boosted estimates for the United States and China.

In Europe, the committee subjecting some of the region’s biggest banks to stress tests said it has widened the factors aimed at determining their financial health. That reinforced confidence in the results, which will be published later this month.

It also raised sentiment ahead of a European Central Bank meeting and news conference, where investors will look for comments from bank head Jean-Claude Trichet on the state of the banking sector and views on the bank stress tests.

Britain’s FTSE 100 was up 1.2 percent at 5,076.62 and Germany’s DAX was 0.5 percent higher at 6,021.78. France’s CAC-40 rose 1.1 percent to 3,522.10.

Financial stocks rallied, with Barclays up 3.1 percent, Deutsche Bank gaining 2.6 percent and Societe Generale gaining 2.9 percent.

Asian stocks jumped more sharply although Wall Street was expected to slip on the open after surging the previous day — Dow industrials futures were down 0.1 percent at 9,966 and Standard & Poor’s 500 futures were 0.1 percent lower at 1,058.50.

In its report, the IMF warned that the European debt crisis could pose a risk to global growth but said a return to recession was unlikely. In fact, strong growth in developing economies and improvements in the U.S. would outpace a stagnation in Europe, which will be hit by painful austerity cuts.

The forecast, along with a strong profit forecast by State Street bank in the U.S. helped boost confidence in the upcoming corporate earnings season.

In Europe, investors were also heartened by the publication of the criteria to be used in the bank stress tests. The results, which are to be published July 23, will cover 91 banks, which represent 65 percent of the European banking sector.

Later in the day, the European Central Bank is widely expected to leave its key interest rate unchanged at a record low while bank president Trichet will be watched closely at a press conference.

“The upcoming bank stress tests will likely feature among the questions but Trichet will comfortably side-step any efforts to get him to pre-judge the likely outcome,” said Daragh Maher, analyst at Credit Agricole.

Other points of interest will be Trichet’s comments on the central bank’s program to buy bonds from banks to increase their cash levels as well as the outlook for growth and inflation.

The Bank of England, meanwhile, announced it had left its interest rates unchanged, as widely expected by analysts.

Further boosting stocks on Thursday was official data showing a strong rise in both imports and exports in Germany, Europe’s biggest economy. The rise in May suggests industry is eagerly importing materials necessary for production and that exporters continue to benefit from a weak euro.

In Asia, Japan’s benchmark Nikkei 225 stock index jumped 256.09, or 2.8 percent, to 9,535.74 and South Korea’s Kospi added 1.4 percent to 1,698.64. Australia’s S&P/ASX 200 climbed 2.4 percent to 4,356.70.

Elsewhere, Hong Kong’s Hang Seng index rose 1 percent to 20,050.50. Benchmarks in Singapore, Indonesia, India and Taiwan were also higher while China’s Shanghai Composite Index dropped slightly.

In currencies, the dollar rose to 88.20 yen from 87.76 yen in New York late Wednesday. The euro climbed to $1.2653 from $1.2633.

Benchmark crude for August delivery was up 59 cents to $74.66 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.09 to settle at $74.07 on Wednesday.

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Associated Press researcher Bonnie Cao in Beijing contributed to this report.

CARLO PIOVANO, Associated Press Writer LONDON