European stock markets opened to losses this morning and them bounced back sharply while Asian stocks took more losses.
Europe's FTSEurofirst 300 was up 0.7 per cent, Britain's FTSE 100 gained 1.3 per cent, Germany's DAX was flat and France's CAC 40 rose 0.9 per cent. The bourses fell as much as 4 per cent yesterday.
The moves were accompanied by the yen hitting a 14-month high against the dollar as risk-related currency plays unwound while demand for government bonds as a safe-haven play rose.
Just after 9am the Iseq index of Irish shares was 0.5 per cent ahead at 8102.87 with AIB, Anglo Irish and Irish Life and Permanent marginally ahead. Bank of Ireland shares dropped slightly to €12.88, however, a fall of six cents.
Yesterday the Iseq fell 3.8 per cent wiping some €4 billion from the value of the companies listed.
Earlier today, Japan's Nikkei plummeted more than 5 per cent to post its biggest one-day percentage loss in nearly six years.
The benchmark fell 874.81 points, or 5.42 per cent, to end at 15,273.68, the lowest since August 7th, 2006. The broader Topix lost 5.55 per cent to 1,480.39, the lowest finish since July 2006.
Markets are being battered by fears of financial instability following troubles with risky US mortgages and a squeeze on credit that has prompted central banks to push money into the financial system.