Financial markets ticked over hesitantly on Thursday with investors digesting mixed U.S. earnings results and waiting for the next move in Greece's debt crisis.
World stocks as measured by MSCI <.MIWD00000PUS> were flat with emerging market equities <.MSCIEF> the same. The pan-European FTSEurofirst 300 <.FTEU3> gained 0.1 percent.
Earlier, Japan's Nikkei <.N225> closed down nearly 1.3 percent. Toyota Motor Corp <7203.T> lost 1.4 percent, extending losses after Moody's Investors Service cut the automaker's credit ratings, forecasting a long slump in the wake of the company's massive recall.
In Europe, the focus remained on Greece and peripheral euro zone economies hit by debt pressures.
The situation in Greece is still worrying and the bond market is not convinced that the rescue efforts are a done deal, said Tammo Greetfeld, equity strategist at UniCredit.
Greece is struggling to convince markets that it can slash its budget deficit and avoid default. It needs to raise 10 billion euros next month with an 8.5 billion euro bond falling due on May 19.
Investors drove the yield on 10-year Greek government bonds to 8.4 percent on Wednesday, the highest since at least 1998.
The yield was at 8.1 percent on Thursday.
Equity markets were also chewing over mixed earnings from Wall Street. Disappointing outlooks from healthcare companies offset strong earnings from Morgan Stanley and Apple Inc on Wednesday.
The euro recovered slightly from earlier lows but was still vulnerable to worries about Greek debt financing. It was up slightly against the dollar at around $1.3417. It hit a 10-month low of $1.3267 hit last month.
The focus has moved from liquidity concerns to one where the market is discounting a debt restructuring or possible default, said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
There is also the risk of contagion to other countries, the risks are very much skewed to the downside.
On bond markets, Spain was to test market appetite for peripheral euro zone debt with the sale of a 15-year bond later in the session. It is expected to sell up to 3 billion euros of the bond.
That will be an interesting test. There was definitely some signs of capitulation in the periphery yesterday, markets are very thin and the danger is we get forced selling, said a bond trader in London.
(Additional reporting by Atul Prakash, Tamawa Desai and Ian Chua; Editing by Susan Fenton)