Investors have bought risky assets across the board for three weeks in a row after a recent run of better-than-expected corporate profits on both sides of the Atlantic.
But markets were cautious ahead of U.S. gross domestic product data on Friday, which some said could prompt some month-end profit taking. The data is expected to show the world's biggest economy contracted 1.5 percent, compared with a 5.5 percent contraction recorded for the first quarter.
"There is no doubt that the headline act will be the U.S. GDP numbers," said Jimmy Yates, head of equities at CMC Markets.
"A weaker number here could set the tone for August and show us that we still have a long way to go before we start seeing growth in the worlds largest economies." The MSCI world equity index rose 0.4 percent, bringing gains to more than 8 percent this month. Since January, the index has risen 16.7 percent, recouping some of the 40 percent-plus losses made when the financial crisis deepened last year.
The FTSEurofirst 300 index erased early losses to rise 0.3 percent while emerging stocks rose 0.8 percent.
Asian stocks outside Japan hit 11-month highs while Shanghai stocks rose 2.7 percent, their biggest daily gain in two months.
China's central bank reassured investors this week that it would stick to a loose monetary policy stance to support the economy and said it would ensure sustainable credit growth.
U.S. crude oil rose 0.3 percent to $67.19 a barrel.
The September bund futures rose 42 ticks. U.S. Treasuries were also firmer after a seven-year U.S. auction on Thursday met with strong demand.
For the week, the Treasury sold a record $115 billion in longer-dated Treasuries and $120 billion in bills.
The dollar fell a quarter percent against a basket of major currencies while the yen rose 0.3 percent to 95.28 per dollar.
Analysts say the yen could come under pressure with domestic investors seeking higher overseas yields. According to data compiled by Reuters, newly launched Japanese mutual funds that invest in global assets have attracted 36.4 billion yen ($382 million) so far on Friday.
