World stocks head for 6th week of gains

LONDON (Reuters) - World stocks steadied on Friday but were still on track for a sixth consecutive week of gains, while the euro fell on worries about the region's prospects.

MSCI's main world stock index was flat despite modest gains in Europe and a rebound in Japan. But the index was up 1.6 percent on the week, gaining around 28 percent since a March 9 low.

U.S. financial services firm State Street said evidence was building that big investors were buying into the rally, particularly in U.S. and emerging market stocks.

"It seems the nightmare may now be ending. Markets have been having quite a party of late," State Street said in a note. "Institutional investors are backing this rally."

Nascent investor confidence has been encouraged by positive results from the likes of JPMorgan and Google, while economic data in some areas is improving. Citigroup was to report results later in the day.

A jump in Chinese industrial output in March has added to a sense instilled by some U.S. indicators that the pace of deterioration has slowed from the alarming rate of just a few months ago.

European Central Bank President Jean-Claude Trichet said on Friday the battered global economy faces a difficult year but will begin a recovery in 2010. Other central bankers have also noted some signs of stabilization.

European shares were volatile, with the pan-European FTSEurofirst 300