Some investors, however, continued to seek out safety, driving gold to a record high of $1,447.40 an ounce, and silver to a 31-year peak at $38.13. Worries mounted about the ongoing violence in the Middle East and fears that Portugal will, in fact, need a bailout.
Rising borrowing costs for Portugal and a downgrade of 30 Spanish banks' debt by rating agency Moody's had weighed on the euro earlier. Spain's largest lenders were spared the rating cut.
Oil prices wobbled as UN-mandated air strikes hit Libya for a fifth night.
Equity markets gained on bets on a continued economic recovery that were coupled with the end of an upbeat quarter. Light volumes, however, have lately underscored caution.
The Dow Jones Industrial Average rose 76.63 points, or 0.63 percent, to 12,162.65. The Standard & Poor's 500 Index added 9.89 points, or 0.76 percent, to 1,307.43. The Nasdaq Composite Index gained 32.13 points, or 1.19 percent, to 2,730.43.
The MSCI All-Country index climbed 0.8 percent, rising for six successive trading days for a gain of more than 4 percent.
In Europe shares rose to a two-week closing high, with the FTSEurofirst 300 gaining 1 percent, led by gains in two major British retailers.
Surveys showed economic recovery continued in March, shrugging off Japan's disaster, although turmoil in the Middle East is pushing prices higher.
The global economic recovery will continue through the rest of the year despite the recent unrest in the Middle East and the disaster in Japan, Barclays Capital said in a note, but signs of higher inflation and and an increased probability of policy tightening called for caution.
"We are recommending that investors shift to a more cautious approach to markets than the risk-embracing positions we have recommended since the recovery got under way two years ago," said Larry Kantor, head of research at Barclays.
The euro was up 0.7 percent against the dollar at $1.4185, after earlier falling to a low of $1.4053 on trading platform EBS.
Sterling fell to its lowest this year against a basket of currencies in the wake of weak U.K. retail sales data and a warning by Moody's on risks to economic growth.
Trade-weighted sterling fell as low as 79.6, its lowest since Dec. 31. Versus the greenback it traded down 0.8 percent at $1.6118.
The yen was steady against the dollar at 80.89 yen, although market players are still wary Japan may intervene to sell the currency if the dollar breaches 80 yen.
Japanese shares slipped on Thursday, with a sell-off in Tokyo Electric Power Co. and financial firms weighing on the broad Topix index as radiation leaks from a quake-stricken nuclear plant stifled any optimism on the global economy.
Market observers said the problems at the troubled power facility remain the key focus for investors, with the market in a narrow range as there have not been any major developments at the plant recently.
They also said that investors will continue to monitor the 9,500 level on the Nikkei as a key psychological threshold.
"The Nikkei faces a lot of selling pressure above 9,500. Foreign operators who bought shares when the Nikkei plunged near 8,000 are looking for opportunities to sell on gains. Domestic investors are waiting to lock in profits above 9,500," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The benchmark Nikkei average fell 0.2 percent, or 14.46 points, to 9,435.01. The Topix slipped 0.8 percent to 853.95.
The Topix underperformed the Nikkei due to heavy selling of TEPCO shares, which tumbled 14 percent to 902 yen, after the firm said on Wednesday it had changed its annual dividend payment forecast to "undecided" from 60 yen per share in its previous estimate.
It was the biggest percentage loser on the Nikkei and the most actively traded share by turnover on the Tokyo Stock Exchange's main board.
Drops in financials also hit the Topix, as short-term investors took profits from recent gains.
Daiwa Securities Group dropped 4.1 percent to 376 yen, while Nomura Holdings fell 3.3 percent to 440 yen and Mitsubishi UFJ Financial Group shed 2.5 percent to 392 yen.
Construction companies continued to benefit from expectations of reconstruction demand, while automakers such as Toyota Motor suffered from worries about disruption to their supply chains. Toyota dropped 2.7 percent to 3,215 yen.
Obayashi Corp. added 0.8 percent to 387 yen and Shimizu Corp gained 1.6 percent to 388 yen.
Egypt's benchmark stock index fell for the second consecutive day on Thursday, closing almost 4 percent lower but paring steeper losses earlier in the session as investors looked to unload holdings after the market's nearly two month closure.
The Egyptian Exchange's benchmark EGX30 index closed 3.73 percent lower, hitting 4,950 points. It rebounded from earlier losses of over 6.7 percent that led to a 30-minute suspension of trading just minutes after the opening bell.
The slide brought the benchmark's year-to-date losses to almost 30.7 percent.
The reversal came as a welcome surprise to many who had feared a repeat of Wednesday's 8.9 percent plunge as the market ended its first day of trade after it shuttered on Jan. 27 amid mounting mass protests that eventually ousted former President Hosni Mubarak.
Prior to its January closure, the market lost over 16 percent in two consecutive trading days, reflecting investor fears about the descent into apparent chaos of a country once viewed as the most stable in the Arab world.
Those fears were also reflected in the country's currency, with the Egyptian pound again coming under pressure as the market reopened.
Oil hovered around $106 per barrel Thursday. The contract for May delivery lost 81 cents at $104.94 per barrel in afternoon trading on the New York Mercantile Exchange.
In London, Brent crude gave up 22 cents at $115.25 per barrel on the ICE Futures exchange.
Prices have jumped 24 percent since the middle of February, when rebellion broke out in Libya and eventually squeezed off production that supplied nearly 2 percent of the world's oil.
