Italy's sale of 6.2 billion euros in bonds on Thursday eased investors' immediate concerns about its funding in the euro zone debt crisis, but stock markets were hit by weaker Chinese trade data.

European shares fell 0.9 percent after recent gains and Wall Street looked set to open lower following data showing China's trade surplus narrowed for a second straight month in September, with both imports and exports lower than expected.

It reflected global economic weakness, which along with the euro zone debt crisis has kept investors avoiding aggressive risk taking over the past months.

In Europe, there appeared some traction to the idea that policymakers were working on a cogent plan to solve the debt crisis, or at least reduce its threat.

Jose Manuel Barroso, president of the European Commission, outlined a broad plan on Wednesday to tackle the euro zone's two-year debt crisis, fuelling optimism.

Maybe the political decisions are finally coming through, said Justin Urquhart Stewart, director at Seven Investment Management.

The sale of Italian bonds went relatively smoothly, although a lot of the buying may have been prompted by cheaper prices ahead of the sale.

Traders said the European Central Bank began buying Italian bonds focused around the 10-year sector shortly after the release of auction results.

Earlier 10-year yields rose to 5.87 percent, their highest since the central bank began purchasing Italian debt in August as part of an effort to cap the country's rising cost of borrowing. The 10-year yield was last at 5.80 percent, 6 basis points higher on the day.

STOCKS MIXED

On stock markets, the FTSEurofirst 300 <.FTEU3> fell but was still heading for its third straight week of gains, something it has not achieved since March/April.

World stocks as measured by MSCI <.MIWD00000PUS> were down a bit.

Earlier, Japan's Nikkei <.N225> rose nearly 1 percent, catching up with U.S. and European gains from Wednesday.

The euro fell broadly, pulling back from a one-month high versus the dollar after the European Central Bank warned about the impact on the currency and the region's banks of involving bondholders in euro zone bailouts.

The euro hit a session low of $1.3711 after an article in the ECB's monthly report said forcing private bondholders to accept losses on euro zone sovereign debt could damage the euro's reputation, prompting traders to take profits on a rally which has been built on investors backing off bets for further euro weakness rather than betting on future gains.

The euro had rallied earlier in the week, climbing to $1.3834 on Wednesday after German Chancellor Angela Merkel and French President Nicolas Sarkozy late last week said they would announce a plan to solve the euro zone debt crisis by the end of the month.

(Additional reporting by Naomi Tajitsu, William James and Brian Gorman; editing by Patrick Graham)

Japan Germany China