A post-EU rescue plan stock rally remained in place on Thursday with emerging market shares up more than 1 percent and global stocks in general adding to the week's gains.

The euro was also stronger, but traded near recent lows against the dollar against a backdrop of expectations for weak euro zone growth.

The Ascension Day holiday stripped some volume, but major markets were open.

World stocks <.MIWD00000PUS> have risen close to 6 percent this week following the weekend's 750 billion euro agreement by the European Union and International Monetary Fund to stave off a sovereign debt crisis.

They were up around half a percent on Thursday with emerging markets <.MSCIEF> putting in a 1.1 percent gain.

The rescue plan has not solved Europe's debt problems but it has put a floor under investors' worst fears of a new financial meltdown and allowed for some pick-up in risk appetite, with credit spreads tightening.

Investors have also been able to focus more on fundamentals such as the state of the economy and corporate earnings rather than reacting to fears over Greece and other EU peripheral economies.

Economics come back to the forefront as a calmer market sentiment has been restored, Brown Brothers Harriman said in a note.

The pan-European FTSEurofirst 300 <.FTEU3> was up half a percent for an 8.9 percent rise this week, essentially regaining last week's losses.

Traders were focusing on a recent spate of soothing company earnings, some of which were initially all but ignored in the fears over a spreading sovereign debt crisis.

The results that we have been seeing from companies have been very positive and are providing a driving force to equity markets, said Henk Potts, equity strategist at Barclays Wealth.

They (results) exceeded market expectations over the course of the past three months and analysts have been predicting a far more confident outlook for the rest of this year.

Japan's Nikkei <.N225> closed up 2.18 percent.

IT'S THE ECONOMY

There was no such bullishness when it came to the euro, which has been battered by the sovereign debt crisis and concerns for the stability of the currency bloc itself.

Although it was up 0.1 percent on the dollar at $1.2644 on Thursday, the currency generally remains under pressure.

Financial markets overall have been returning to calm but the euro remains on a downtrend, said Kosuke Hanao, head of treasury product sales at HSBC in Japan.

Although the panic sell-off in the euro has eased at the moment, the downside risk still remains.

Part of this is because of concerns that the euro zone's tentative recovery -- quarterly growth was 0.2 percent in January-March -- will be hurt by the need for countries to cut spending to lower their bloated deficits.

Spain said on Wednesday it would slash civil service pay by 5 percent this year, freeze it in 2011, cut investment spending and pensions and axe 13,000 public sector jobs in a drive to meet EU deficit targets.

Even though the euro zone economy has avoided a renewed contraction during the past three quarters, the recovery so far has failed to gain momentum, Roubini Global Economics said.

Bund futures were lower as demand for safe havens was tempered.

Gold, however, was in demand at near record prices around $1,250 an ounce as traders considered the inflationary impact of the rescue plan.

(Editing by John Stonestreet)

Japan