It was a similar pattern in foreign exchange, where emerging market
currencies, having been crushed to historic lows, rose against the
dollar.
The specter of deflation in the euro zone reappeared, however.
Consumer prices fell across the 19-nation bloc in September, adding
pressure on the European Central Bank to inject more policy stimulus
sooner rather than later.
Around midday in Europe, the FTSEuroFirst 300 index of leading
European shares and Germany's DAX were up 2.5 percent at 1,370
points and 9,678 points, respectively. France's CAC 40 rose 2.7
percent.
Shares in mining and trading firm Glencore, which plummeted on
Monday along with commodity prices, jumped 10 percent after it
sought to reassure investors over its debt situation. They had risen
17 percent on Tuesday.
Britain's FTSE 100 was up 2.2 percent, and U.S. stock futures
pointed to a rise of more than 1 percent at the open on Wall Street.
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"The market was squeezed and this is facilitating a rebound ...
although it's too early to say if risk appetite has returned," said
Ifigest fund manager Roberto Lottici.
Analysts at Daniel Stewart & Co noted that even after the
third-quarter weakness, stock valuations still look high, so
investors should brace for a difficult fourth quarter, too.
"This reinforces our current view that most equity indices are more
likely to fall at least in the short-term rather than bounce back to
new record highs," they said in a client note on Wednesday.
The FTSEuroFirst is on track to lose almost 10 percent in the third
quarter, the biggest since a 17 percent decline four years ago in
the depths of the euro zone crisis.
Earlier in Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan rose 1.8 percent. It had reached its lowest since June
2012 on Tuesday on fears that China's economic slowdown would curb
the country's huge appetite for commodities and resources.
The index was on track for a 17.5 percent loss in the quarter, also
its worst performance in four years.
Japan's Nikkei brushed aside an unexpected drop in the country's
industrial output to close up 2.7 percent, paring losses for the
quarter to 14.1 percent, its deepest since 2010.
2.4 TRILLION EUROS QE?
Annual euro zone inflation in September was -0.1 percent, turning
negative for the first time since March and adding pressure on the
ECB to extend and expand its quantitative easing program of bond
purchases.
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This prompted one of the boldest ECB forecasts to date from analysts
at Standard & Poor's.
"We believe the ECB will extend its QE program beyond September
2016, most likely until mid-2018, and that it could reach 2.4
trillion euros - more than twice the original 1.1 trillion
commitment," they said in a note.
The inflation data helped keep the euro under pressure. It was last
down 0.3 percent at $1.1215 , and two-year German bond yields were
little changed at -0.245 percent.
Demand for the safe-haven yen eased as stocks steadied. The dollar
rose to 120.25 yen, up 0.4 percent on the day and a full yen from
the day's low of 119.24.
Yields on U.S. Treasury bonds rose. The 10-year yield was up 4 basis
points to 2.09 percent as comparable German yields were little
changed.
Emerging market currencies fared better against the dollar. South
Africa's rand rose 1 percent, although it was still on track for a
quarterly loss of 14 percent, its 14th in succession.
Zambia's kwacha, which had hit a record low on concerns about
Glencore and falling copper prices, rebounded around 2 percent.
Benchmark three-month copper on the London Metal Exchange CMCU3 rose
1.7 percent to $5,057 a tonne, compared with a six-year low of
$4,855 hit in August.
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Prices of other industrial metals, including aluminum and zinc, also
halted recent slides.
Crude oil futures were slightly lower, however. U.S. crude fell 0.3
percent to $45.11 a barrel and Brent slipped 0.2 percent to $48.12.
(Additional reporting by Danilo Masoni in London, editing by Larry
King)
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