World stocks eked out small gains on Thursday as mixed data from China and the United States reminded investors of the fragility of rebounding economies and markets.

The Japanese yen rebounded in a shift from higher-yielding currencies.

A day after a mixed set of economic data from the United States, it was China's turn, saying its economy grew more slowly than expected in the first quarter, but also showing improvements in March, providing tentative signs that the worst may be behind.

On Wednesday, data showed U.S. consumer prices in March posted their first 12-month drop in nearly 54 years, while industrial production slipped further.

However, also on Wednesday, the Federal Reserve said economic activity in some parts appeared to be stabilizing, while other data showed that a decline in factory activity in New York state eased this month.

After an impressive month-long rally in global equities investors still appear conflicted between seeing glimmers of hope that a global economic downturn is showing signs of easing and other indicators that point to more pain ahead.

It was summed up by a Morgan Stanley note:

We see green shoots of recovery and expect global growth to resume in (the second half of 2009). The Great Recession still has a way to go and the recovery is not likely to be V-shaped.

MSCI's all-country world stock index <.MIWD00000PUS> was up around 0.1 percent, but still on track for a sixth consecutive week of gains. It has gained 27 percent since hitting a low on March 9.

European shares were flat to higher with banks gaining ahead of JPMorgan figures due later.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares was up less than 0.1 percent.

Earlier, Japan's Nikkei stock average <.N225> trimmed gains to 0.1 percent after the China data.

It clung to gains of 12.30 points at 8,755.26 after earlier touching 9,030.00, one of several recent failed efforts to break significantly above 9,000.

DOLLAR RISES

The yen and dollar rose against other major currencies on the mixed economic data pushed investors toward perceived safer assets.

Investors are reassessing whether a recent rally in risk assets is sustainable and if a economic recovery is taking place, said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.

The yen was up 0.7 percent against the dollar at 98.64 yen, while it was up 1.1 percent against the euro at 129.79 yen.

The dollar was up 0.2 percent against a basket of currencies <.DXY>.

Euro zone government bond prices fell. Ten-year yields were 3 basis points higher at 3.183 percent. Two-year bond yields were 2 basis points higher at 1.375 percent. (Additional reporting by Rafael Nam and Tamawa Desai; Editing by Andy Bruce)

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