LONDON (Reuters) – European and US futures markets rallied on Thursday after Wall Street's worst day since 2011, and heavy losses in Asia gave global equities a further boost against their worst month since the financial crisis.
The German DAX .DAX reached nearly two-year lows, and the London FTSE. FTSE and the Paris CAC 40 .FCHI both climbed to a 1/2-year low early on, but there was some stability.
The pan-European STOXX 600 was in positive territory after a 3.7% overnight turmoil for Tokyo's Nikkei and US futures rose 0.7-1.3% as Wall Street announced a six-day case series.
The currency dealers also broke the franc CHF = and the Japanese yen JPY = security transactions. Italian and Spanish bonds held their ground as Mario Draghi reiterated the plans of the European Central Bank to cautiously cancel their stimulus measures.
"Uncertainties regarding protectionism, vulnerabilities in emerging markets and financial market volatility remain important," Draghi said at the post-meeting ECB press conference.
"Significant monetary stimulus is still needed," he said. But there was also an important summary. "Is this enough (turbulence) to change our baseline scenario? No," he added, expecting an agreement between Italy and Brussels on Rome's disputed budgets.
Investors have become increasingly nervous about high stock prices, faster rate hikes in the US, Italy and a trade war between China and China that threatens to dampen world growth.
Almost 60 percent of the 2,767 shares in the global MSCI stock index .MIWD00000PUS are now in the bear market – 20 percent or more below their recent highs.
There are also growing concerns about the overspending of Italy's new populist coalition.
More worries in Asia overnight had seen the global exit on MSCI World close to $ 7 trillion since January. Pan-Asia Pacific equities .MIAPJ0000PUS slid more than 2 percent, while Japan's Nikkei .N225 fell by as much as 4 percent to a six-month low.
The only relief was that Chinese stocks were in the black after a fall of up to 2.5 percent. .SSEC The government's new government support measures had not lessened concerns over the high levels of indebtedness and customs war with the United States.
"If you're a company and you're responsible for an investment budget, there's so much uncertainty about a trade war over Brexit over the next few years," said Jim McCafferty, director of equity research, Asia without Japan at Nomura.
(For graphic click on tmsnrt.rs/2ONOPwD)
The stabilization of Europe was driven by the results of the Swiss bank UBS and the engineering giant ABB (ABBN.S.), which contributed to the nervousness caused by this gloomy mood of the US giant Caterpillar (CAT.N.).
Wall Street futures rose between 1 percent for the S & P 500 and Dow Jones and even 1.7 percent for the Nasdaq. Wednesday afternoon results from Microsoft and strong advertising revenue from Twitter. (TWTR.N) Tech stocks brought a little encouragement. [.N]
Google Parent Alphabet (GOOGL.O) and Amazon (AMZN.O) later both were more than 2.2 percent higher than their results, while more general economic observers were reassured as the number of Americans receiving benefits dropped to more than 45 years low.
The ECB's message that the ECB remains "stable" after weak economic data from the eurozone this week worsened fears of global economic growth, and a surprise slump in home sales in the US, which indicated rising mortgage rates, dampened demand for Living room.
It was not just the ECB in action. Turkey, which has stabilized in recent weeks after being at the center of emerging-market issues, halted its recent rate hikes in a move that, for once, did not unsettle the markets.
In fact, the lira has won. The bank has already doubled its interest rates this year to 24 percent, after a 40 percent decline in the Turkish currency had brought TRY = Ankara to the brink of a full-blown currency crisis.
In the major currency markets, the euro rebounded to EUR 1,11410 after breaking through a long-standing bulwark of USD 1.1430.
Against a basket of currencies, the dollar dropped from nearly nine weeks to 96,339 .DXY. For the first time in days, it barely moved against the safety-first Japan Yen at JPY 112.28.
The Sterling also climbed to £ 1.2887 by seven weeks after plummeting 0.8 percent overnight, and the oil price began to rise again after being hit by concerns over global growth in recent sessions was.
Brent crude LCOc1 was last at $ 76.50 a barrel, while US crude was $ 66.63 CLc1 [O/R], Safe Port Gold XAU = was a bit weaker at $ 1,236.76 per ounce.
"Expect spirited rallies," said Robin Bieber, technical analyst at London-based brokerage PVM Oil.
Additional reporting by Christopher Johnson in London and Swati Patel in Sydney; Editing by Alison Williams