World stocks, dollar, oil extend gains after China cuts rates

LONDON (Reuters) - European shares, oil and the dollar extended gains in midsession trade on Tuesday as a market rebound gathered pace after China cut interest rates and bank reserve requirements to stimulate its wavering economy.

The pan-European FTSEurofirst 300 index rose 4.2 percent, recouping the bulk of the 5 percent-plus it lost the previous day.

The dollar index jumped to a gain of 0.70 percent against its currency basket.

U.S. crude futures traded at $39.60 per barrel, up 3.6 percent on the day, while Brent rose 3.7 percent to $44.28.

Global markets were pummelled on Monday, with Chinese shares falling 8 percent, prompting market calls for stimulus measures from authorities in Beijing that grew louder overnight after China's main equity markets slumped a further 8 percent.

(writing by John Stonestreet; editing by Anna Willard)