* World stocks gain, up 7 percent over nine sessions
* Euro gains slightly against dollar; debt tensions ease
* European stocks gains for eighth consecutive session
By Jeremy Gaunt, European Investment Correspondent
LONDON, June 18 (Reuters) - World stocks rose for a ninth
day running on Friday, extending a modest rally that has seen
U.S. and European shares regain all their losses for the year as
the worst fears about euro zone sovereign debt have eased.
The dollar was lower against a basket of currencies <.DXY>
and the euro.
MSCI's all-country world index was up about a third of a
percent, giving it around a 7 percent gain since its June 7
close and more than 3 percent this week.
Its emerging markets counterpart <.MSCIEF> was up more than
half a percent.
Investors have gradually been moving back into riskier
assets, with a sharp correction that has made valuations more
attractive also a factor.
Soothing investor tensions further, Spain's Treasury easily
sold 3.5 billion euros of debt on Thursday, which a government
official said gave it enough liquidity to deal with a 24 billion
euro ($29.4 billion) repayments crunch in July.
The European Union also agreed to publish European bank
stress tests next month.
"Financial system concerns have eased, and some players are
re-establishing carry trades, seeking higher-yielding assets,"
said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi
UFJ, summing up the mood.
Fund tracker EPFR Global reported that more than $37 billion
flowed out of money market funds during the latest week and into
high-yield and emerging market bond funds and global equity
funds. Emerging market equity finds saw the most net inflows in
10 weeks.
The FTSEurofirst 300 <> was up 0.6 percent, its eighth
consecutive session of gains. It took the index into positive
territory for the year to date, joining U.S. stock indexes such
as the S&P 500 <.SPX>).
Japan's Nikkei <> ended flat but had its biggest weekly
rise in three months.
EURO STEADY
The euro held at three-week highs, on track for its second
straight week of gains. It was near $1.24 <EUR=> as investors
shed short positions after solid demand at the Spanish
government bond auction.
The single currency has gained more than 2 percent so far
this week, pulling further away from a four-year low of $1.1876
struck on June 7.
On debt markets, two-year bond yields <DE2YT=TWEB> were 3
basis points higher at 0.546 percent, with 10-year yields
<DE10YT=TWEB> up the same at 2.702 percent.
(Additional reporting by Tamawa Desai; editing by John
Stonestreet)
