* MSCI world equity index up 0.1 percent at 206.88
* Euro briefly falls after weak Ifo; yen firmer
* European stocks rise; shrugs off declines on Wall Street
By Natsuko Waki
LONDON, March 25 (Reuters) - The euro slipped against the dollar on Wednesday after a closely-watched survey showed German corporate sentiment fell to a record low, while world stocks inched up after hitting a 5-1/2 week high the previous day.
The Munich-based Ifo economic research institute said its business climate index, based on a monthly poll of around 7,000 firms, fell to 82.1 from 82.6 in February. A Reuters poll of 45 economists had pointed to a reading of 82.2.
"The Ifo index leaves little room for hope of an economic stabilisation in the second half of the year," said Ulrich Wortberg, economist at HELABA.
"To be able to speak of a turnaround in the economic situation, the overall Ifo index would have to stabilise in three consecutive months."
The euro was down 0.13 percent at $1.3459. The yen rose 0.2 percent to 97.71 per dollar. The dollar was up 0.15 percent against a basket of major currencies, extending a recovery after scoring its biggest weekly fall since 1985 last week.
A rise in auto and retail stocks helped European stocks extend gains for a third consecutive day. Sentiment has been improving for global stock markets after the U.S. government revealed plan earlier this week to spend up to $1 trillion to buy up toxic bank assets.
"We suggest that quantitative easing and attempts to ring fence toxic assets currently held in the financial sector balance sheet have improved the chance for the economy to rebound and the combination of these two measures may de-block credit flows," BNP Paribas said in a note to clients.
The FTSEurofirst 300 index rose 0.3 percent. MSCI world equity index rose 0.1 percent, having hit a 5-1/2 week high on Tuesday. The index has risen more than 10 percent this month, on track for its biggest monthly gain in nearly 10 years.
Emerging stocks were up 0.1 percent.
U.S. crude oil fell 1.8 percent to $53.03 a barrel as concerns grew over weakening global energy demand.
The June bund futures fell 5 ticks.