Global stocks have plunged, with coronavirus panic selling hitting nearly every asset class before finding some kind of floor as hopes turned to a US stimulus package.
European and US stock futures traded in positive territory and some of Asia's deepest losses were recovered by the end of Friday's sessions, in which tight liquidity exaggerated moves.
Japan's Nikkei fell 10 per cent before paring the drop to close six per cent lower. Australia's S&P/ASX200 had its wildest trading day on record, falling past eight per cent before surging in the last minutes of trade to settle 4.4 per cent higher after the close.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.3 per cent by midafternoon after being down more than five per cent during the morning.
An electric board shows the closing price of 225-issue Nikkei Stock Average in Chuo, Tokyo. Source: Yomiuri Shimbun
The turnaround came as central banks from the United States to Australia pumped liquidity into their financial systems and as hopes grew that US Democrats and Republicans could pass a stimulus package on Friday.
It was not clear if the late market moves signalled a recovery in the dire sentiment that has wiped some $US14 trillion from world stocks in a month and had Asian markets in freefall at the open.
While there was no firm explanation from investors on just what prompted the late comeback, some believe the plunge may have run its course for now.
"The prevailing market overreaction has more than priced potential negative impacts to global economic activity," Krishna Kumar, a portfolio manager at Eastspring Investments, said in a note.
"Based on the current information, we do not see the recent COVID-19 and/or oil price declines as permanent longer-term issues for the companies in the fund."
By late afternoon, Hong Kong's Hang Seng was down 3.5 per cent and Korea's Kospi, which had busted through circuit-breakers earlier in the session, had recouped losses to sit 3.7 per cent in the red.
A woman walks past an electronic billboard displaying the Hang Seng Index in Hong Kong. Source: EPA
Gold and oil had steadied but the bond market still bore the scars of the morning's plunge after the Dow Jones posted its worst drop since the 1987 Black Monday crash.
In the somewhat calmer currency markets, the US dollar held its ground as investors nervous about systemic risks drove demand for the world's reserve currency.
Majors stabilised after furious dollar buying overnight, with the euro finding footing about $US1.1200 and the Aussie recovering to $US0.6300.
Emerging market currencies were punished: the won and baht dropped as far one per cent and the rupiah two per cent.
The plunge, as the coronavirus pandemic spreads, gathered pace after US President Donald Trump spooked investors with a move to restrict travel from Europe, and after the European Central Bank disappointed markets by holding back on rate cuts.
Trade was halted on the S&P 500 overnight after it hit circuit-breakers. It fell further when trade resumed, losing 9.5 per cent to close 27 per cent below February's peak.
The VIX volatility index and an equivalent measure of volatility for the Euro Stoxx 50 hit their highest since the 2008 financial crisis.
In commodities, Brent crude rose 1.9 per cent to $US33.84 a barrel after falling more than seven per cent on Thursday. US crude gained 2.4 per cent to $US32.26 per barrel.
