European shares inched up from 26-month lows on Friday and the euro rose after the G20 major economies pledged to preserve financial stability, but risk sentiment remained fragile on fears of renewed recession in the developed world.

Finance ministers and central bankers from the Group of 20 said they would take all steps necessary to calm the global financial system and said central banks were ready to provide liquidity, helping the euro advance against the dollar.

The G20 pledge of action provided a respite for world stocks after they tumbled to their lowest level in 13 months on Thursday, hurt by the risk of new recessions in the United States and Europe and weaker economic data from China.

Metals prices bucked the trend, falling on worries that the gloomy economic outlook signaled lower industrial demand, and analysts said any G20-inspired market bounce would likely be short-lived.

The pan-European FTSEurofirst 300 index rose 0.4 percent, after dropping 4.7 percent on Thursday.

It is a relief rally and investors are just picking up some stocks on the cheap, Mark Priest, senior trader at ETX Capital said.

I do not see how everything has changed overnight. Kick-starting the economy is easier said than done and it will take a lot more than what has been put on the table.

The tentative gains in Europe contrasted with falls in Asia, where the MSCI's broadest index of Asia Pacific shares outside Japan fell 3 percent to its lowest level since May 2010. This pulled the MSCI world equity index 0.1 percent down.

The G20 statement came as finance ministers and central bankers met in Washington, under pressure from investors to show action in the face of rising stresses in the financial system.

Several European banks have seen their share prices tumble and their cost of funding rise as investors worried about their exposure to debt issued by Greece and other debt-heavy euro zone countries.

Global stocks as measured by MSCI's All-Country World index are now in bear market territory -- defined as a fall of 20 percent or more -- having fallen 23 percent from their 2011 high in May.

The euro clawed off an 8-month low against the dollar and was last up 0.4 percent up at $1.3511 after the G20 pledge and as the tentative recovery in riskier assets prompted some profit-taking in the dollar.

The G20 also said the euro zone's rescue fund could be bolstered but traders and strategists said there was little that was new and the pledges needed to be followed up with action.

I think there was some expectation in the market that they would signal concrete action or immediate coordinated steps but that language of their statement sticks very much to what we've heard from them in the past, said Todd Elmer, a currency strategist at Citi in Singapore.

I wouldn't be surprised to see the slight bounce we have seen in the euro and other risky assets this morning start to unwind, he added.

Commodity markets, copper in particular, bore the brunt of the global rout that accompanied the Fed's gloomy outlook. Brent crude oil futures posted their biggest single-day loss in six weeks on Thursday and the Reuters-Jefferies CRB commodity index lost 4.4 percent.

Metals fell further on Friday, with copper losing 7 percent to $7,140 a metric ton, nickel down more than 8 percent and tin plunging more than 12 percent.

Brent futures were slightly firmer at $105.72 a barrel.

(Additional reporting by Alex Richardson and Masayuki Kitano in Singapore, Atul Prakash in London; Editing by John Stonestreet)

China Japan G20