European and US stocks staged a rebound Thursday on hints of additional European Central Bank stimulus and a rise in oil prices from 12-year lows.
After plunging by 3.5 percent Wednesday, major European indices in Frankfurt, London and Paris shot up nearly two percent after the ECB signalled it stood ready to help if the economic outlook darkens further.
In New York, the gains were less pronounced, with the S&P 500 climbing 0.5 percent behind strong gains in petroleum shares.
The ECB, as expected, kept interest rates unchanged, but bank chief Mario Draghi highlighted worries about weak inflation in pledging to reconsider monetary stimulus levels in March.
"We have the power, willingness and determination to act," Draghi told a news conference. "There are no limits how far we are willing to deploy our policy instruments."
US stocks, which had also suffered bruising losses on Wednesday, advanced, with the S&P 500 climbing 0.5 percent behind strong gains in petroleum shares.
Sentiment improved following a 4.2 percent rise in US oil prices to $29.53 a barrel, a move partly seen as a technical bounce following Wednesday's sharp decline to a 12-year low.
Still, trade was choppy, with the Nasdaq briefly falling into negative territory in the afternoon and the Dow and S&P 500 ending well below session peaks.
"There's a lot of damage on the tape and I want to be sure the lows made yesterday afternoon hold, before we get too excited and buy things," said Mace Blicksilver, director of Marblehead Asset Management.
"It's nothing really to get that excited about that oil bounced a dollar."
Despite the overall rebound in New York, bank shares suffered across the board, amid increased concerns that banks will be hit hard in their loan exposure to the weak oil sector.
- Ruble hits fresh low -
Shanghai's main stock index slumped by more than three percent Thursday, despite a huge injection of cash into financial markets by the People's Bank of China (PBoC).
"The PBoC is trying to put liquidity back in the financial system after capital outflows and ahead of the lunar New Year holidays," said William Wong, head of sales trading at Shenwan Hongyuan Group.
"Sentiment is volatile and it will take some time to restore investor confidence."
In oil-dependent Russia, the ruble plummeted to new record lows against the dollar, tumbling at one point by more than 4.0 percent.
The ruble -- which has already been battered over the past 18 months by low energy prices and Western sanctions over Ukraine -- also weakened against the euro.
- Key figures around 2200 GMT -
New York - Dow: UP 0.7 percent at 15,882.68 (close)
New York - S&P 500: UP 0.5 percent at 1,868.99 (close)
New York - Nasdaq Composite: UP 0.01 percent at 4,472.06 (close)
London - FTSE 100: UP 1.8 percent at 5,773.79 (close)
Frankfurt - DAX 30: UP 1.9 percent at 9,574.16 (close)
Paris - CAC 40: UP 2.0 percent at 4,206.40 (close)
EURO STOXX 50: UP 2.1 percent at 2,943.92 (close)
Shanghai - Composite: DOWN 3.2 percent at 2,880.48 (close)
Tokyo - Nikkei 225: DOWN 2.4 percent at 16,017.26 (close)
Euro/dollar: DOWN at $1.0878 from $1.0890 Wednesday
Dollar/yen: UP at 117.66 yen from 116.92 yen