(Reuters) - Financial markets regained some composure on Thursday after roller-coaster sessions prompted by the euro zone's debt problems and jitters over tensions on the Korean peninsula.

Risk appetite improved slightly on the back of solid overnight gains on Wall Street, but there would be no follow though from that quarter as U.S. markets were closed for the Thanksgiving holiday.

World stocks as measured by MSCI .MIWD00000PUS were down slightly, with Europe and Japan up.

Yield spreads on Spanish and Portuguese bonds -- watched for signs they will be the next dominoes to topple in Europe's crisis -- were slightly tighter than recent highs.

Some attention was turning to German debt with investors pushing up yields after a raft of robust economic data and as they considered whether the cost of bailouts would impact core issuers.

"If it all goes wrong and a lot more money is needed then it's going to impact Germany, plus their banks have a lot of exposure, which is why we're not seeing the typical flight-to-quality flows you might expect," said one trader, who asked not to be named.

Investors have also begun considering whether German plans to include collective action clauses in eurozone sovereign debt issues will lead investors to price in more risk generally for such bonds.

Some institutional investors even have rules against buying bonds with CACs altogether.

On foreign exchange markets, meanwhile, the euro slipped about 0.2 percent to $1.3312, helping the dollar hit a two-month high against a basket of major currencies .DXY.

"Things are a bit sidelined due to the U.S. holiday but there is still a lot of nervousness about euro zone peripheral debt problems. So the euro remains a sell into rallies and not a buy on dips," said Paul Mackel, HSBC's director of currency strategy.

MIXED STOCKS

World stock markets were generally steady because of the U.S. hiatus with MSCI's all country world index down 0.1 percent and its emerging market counterpart gaining 0.1 percent.

Europe's FTSEurofirst 300 .FTEU3 rose about 0.1 percent. Japan's Nikkei .N225 closed up 0.5 percent.

Koen De Leus, strategist at KBC Securities, said the European market was getting some support from recent good economic data, including on consumer spending, joblessness and consumer confidence.

French consumer confidence was the latest sentiment indicator to beat forecasts in Europe on Thursday, following a strong reading from Germany's closely watched Ifo survey a day earlier.

"Markets are on a rollercoaster. Despair on the ride down due to the day-by-day increasing debt contagion in Europe is occasionally relieved by better-than-expected macro data from Europe and the U.S. It's a delicate balance," De Leus said.

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