With sentiment still fragile in the aftermath of the banking crisis, a risk-on rally proved short-lived, leaving the MSCI ex-Japan index swinging between gains and losses on Thursday. The dollar firmed up, continuing its rebound, while gold eased.

But as we are at the 'no news = good news' stage of the recovery from the banking worries, investors are preparing to try again as Europe wakes up with futures indicating a higher open.

Much of the market exuberance of the past couple of days came after Alibaba Group unveiled plans to split up, a move investors cheered in the hope that the worst for the Chinese tech sector is over. In a call to discuss the plan to split into six units, Group CEO Daniel Zhang said on Thursday the company's breakup plan will allow its units to become more agile and eventually list on their own.

Investors hope the plan will help unlock value for the internet behemoth. Alibaba's US shares currently trade at 11 times its forward earnings, according to Refinitiv data, below its 5-year average of 20 times as well as those of its rival JD.com and peer Amazon.com.

With fears of a widespread banking crisis easing, investor attention has switched to Fed vs inflation. Traders will get a glimpse of which way inflation is headed before the week ends, with data on Personal Consumption Expenditures, the Fed's favourite gauge of inflation, due on Friday.

In corporate news, UBS Group rehired Sergio Ermotti as CEO to steer its massive takeover of neighbouring Swiss bank Credit Suisse in a surprise move that pleased investors.

Meanwhile, the U.S. banking system's top cop said the scope of blame for Silicon Valley Bank's failure stretches across bank executives, Federal Reserve supervisors and other regulators.

Key developments that could influence markets on Thursday:

Economic events: Eurozone sentiment indicators, Germany preliminary CPI, U.S. Q4 GDP

Speakers: BoE's Catherine Mann, ECB's Isabel Schnabel

(Reporting by Ankur Banerjee; Editing by Muralikumar Anantharaman)