* European stock markets up around 2 percent
* G20 finance leaders try to calm markets, message mixed
* Risk sentiment improves with oil, better U.S. data
* Sterling steadies after Brexit sell-off
By Patrick Graham
LONDON, Feb 26 (Reuters) - Stock markets gained for the
third day in five on Friday as G20 policymakers meeting in
Shanghai sought common ground on how to reboot a struggling
global economy in the face of renewed financial and political
risks.
Another day of steadier oil and currency prices LCOc1
supported the brighter mood after a week marked chiefly by the
woes of Britain's pound at the start of a campaign over whether
to leave the European Union in a referendum in June.
Setting the tone for the Shanghai meeting of the Group of
20, China's central bank chief, Zhou Xiaochuan, said Beijing
still had the room and tools to support the world's second
largest economy.
Chinese .SSEC and other Asian stock markets .N225 made
guarded gains and Europe's major markets were all up by around 2
percent. The yuan currency, battered in January by speculation
Beijing would have to devalue sharply, was roughly steady.
Sterling gained around half a percent against the euro and
dollar. GBP=D4 EURGBP=D4
"The focus is definitely on the G20 meeting, which has the
ability to support the market, particularly the comments from
Zhou... that there is no basis for further yuan depreciation,"
said the head of emerging market research at Credit Agricole (PA:CAGR),
Sebastien Barbe.
"It is key for them to convince the market that they are not
going to enter into a currency war."
With the world economy facing its most serious crisis of
confidence since the global financial turmoil of 2008-9,
economists and officials have raised the prospect of governments
pledging together to spend more to bolster growth.
German Finance Minister Wolfgang Schaeuble, however, was
quick to declare that the scope for monetary and fiscal policy
was exhausted globally and called for more structural reform.
Italian central bank governor Ignazio Visco said markets should
not expect concrete action from the meeting.
"We'll get supportive statements on the growth outlook
remaining decent and ... we'll hear that policy options are
still available if growth were to take a much more significant
dip downwards," said Alvin Tan, a currency strategist with
French bank Societe Generale (PA:SOGN) in London.
"But despite the likely positive rhetoric, it's going to be
rhetoric. We just don't see any substantive co-ordinated
measures coming out of the G20."
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS gained just over 1 percent. South Korea .KS11
was roughly flat, while Japan's Nikkei .N225 gained just 0.3
percent.
Wall Street's S&P 500 scored its highest close since early
January on Thursday after oil staged a turnaround on speculation
a March meeting of major producers might stabilise prices.
U.S. crude CLc1 rose 1.6 percent to $33.04 a barrel. Brent
LCOc1 was 16 cents lower at $35.13.
On the British question, UK finance minister George Osborne
said that the pound's 3 percent fall in three days at the start
of this week was a warning that the "Brexit" debate was "not
some political parlour game".
The pound has recovered some ground since hitting 7-year
lows against the dollar on Wednesday and is now down 2.7 percent
on the week, its worst performance since 2010.