Pace of selling slows after Wall Street sell-off

Equity markets in Europe recovered some calm after the previous session's heavy sell off but Asian and emerging markets suffered further falls after a broad sell-off on Wall Street.

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The pace of the selling nearly everywhere appeared to be slowing, although Asian emerging market equities continued to feel the strain. The dollar was a winner against some of its rivals; however, many managed to claw back some losses. Government bonds lost ground as yields pushed higher but gold and silver regained some poise.

European equities opened with some modest gains. The pan-European FTSE Eurofirst 300 index climbed 0.5 percent in the first hour of trade, while London's FTSE 100 added 0.5 percent and Frankfurt's Xetra Dax inched 0.2 percent higher.

Overnight, the Dow Jones Industrial Average on Wall Street lost 2.3 percent while the S&P 500 fell 2.5 percent, which set the tone for much of Asian trade.

But in Tokyo, the Nikkei 225 turned around its morning losses to climb 1.7 percent as investors looked to the benefits of a further slide in the Japanese currency on the country's exporters.

Investors continued to sell China-related stocks, but again, the losses were only modest, with Hong Kong's Hang Seng index shedding 0.6 percent, while China's CSI 300 dropped just 0.2 percent.

The emerging Asia markets were still heavily sold, however. The Philippines index was off 2.3 percent and has now lost 16 per cent since its May peak. Indonesian stocks fell 1.9 percent and South Korea's Kospi index lost 1.5 percent. Data released overnight showed further sizeable redemptions from both Asian and global emerging market equity funds.

In currencies, the dollar was flat against both the euro and sterling, but climbed 0.7 percent against the yen to Y97.97. The South Korean won was among the biggest fallers against the dollar among Asian emerging market currencies, down 0.7 percent against the dollar, but many EM currencies found support. Both the South African rand and the Mexican peso inched up 0.3 percent against the greenback.

Government bond markets were also calmer, pushing yields - which move inversely to prices - a little lower. The yield on the 10-year US Treasury eased 0.7 basis points to 2.41 percent, although the 10-year German Bund yield climbed 1.4bp to 1.68 per cent and the 10-year UK Gilt yield added 2.4bp to 2.32 percent. Periphery bond yields were lower, with Spanish and Italian benchmark yields down about 6 basis points

Oil and gold climbed on commodity exchanges following heavy losses on Thursday. Brent crude added 0.6 percent to USD.81 a barrel, while spot gold reclaimed 1.4 percent to USD95.56 after losing as much as 5.5 percent in the previous session.