European and US markets attempted a rebound yesterday after Wall Street’s worst day since 2011 and heavy losses in Asia gave global stocks another boot towards their worst month since the financial crisis.

It was far from plain sailing. Germany's DAX  had hit a near two-year low and London's FTSE and Paris's CAC 40 both brushed 1 1/2-year lows early on after Japan had plummeted overnight, but a semblance of stability was emerging.

The pan-European STOXX 600 was darting in and out of positive territory, while the S&P 500 and Dow Jones both climbed 0.7 and the tech heavy Nasdaq bounced 1.5 per cent, having lost 8 to 9 per cent this month.

Currency dealers were also unwinding Swiss franc and Japanese yen safety trades and Italian and Spanish bonds held their ground as Mario Draghi reiterated the European Central Bank's plans to carefully remove its stimulus.

Almost 60 per cent of the 2,767 stocks in MSCI's global equity index are now in bear-market territory - down 20 per cent or more from their most recent peaks.

There has also been growing concerns about overspending by Italy's new populist coalition.

More woes in Asia overnight had seen the global wipeout on the MSCI World since January near $7 trillion. Pan Asia-Pacific shares skidded more than 2 percent while Japan's Nikkei tumbled as much as 4 per cent.

Europe's stabilisation was aided by results from Swiss bank UBS and engineering giant ABB which helped take the edge off jitters caused this week by a gloomy tariffs warning from the US behemoth Caterpillar

Wall Street snapped its six-day losing streak as reassuring results from Microsoft and strong advertising revenues from Twitter brought some timely cheer to tech stocks.

The ECB's "steady as she goes" message came after weak euro zone economic data this week added to angst over world growth, and a surprising slump in US home sales, which suggested rising mortgage rates were sapping demand for housing.

In the main foreign exchange markets, the euro recovered to $1.1410, having breached a long-standing bulwark of $1.1430.

Against a basket of currencies, the dollar eased from near a nine-week peak to 96.339. For the first time in days it was barely budged against the safety-first Japanese yen at 112.28 yen

Sterling also inched off a seven-week trough to $1.2887, having dropped 0.8 per cent overnight, and oil prices began to tick up again, having been dragged down in recent sessions by the concerns over global growth. Brent crude was last at $76.50 a barrel, while US crude was at $66.63. Safe-haven gold was a tad weaker at $1,236.76 an ounce.

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