US and European markets have recovered some ground amid signs authorities are implementing measures aimed at easing the economic pain caused by the coronavirus outbreak.
The main US indexes gained more than 3% in early trade, while London’s FTSE 100 and other exchanges made similar moves.
The rally comes a day after Wall Street suffered its biggest losses since 1987.
Investors fear economies could slide into recession as a result of the pandemic and steps to tackle it.
In many countries business has been disrupted, events cancelled and schools closed in an effort to contain the spread of the virus.
On Friday, the European Union said it will put in place a package of measures, including a €37bn euro (£33bn) investment initiative.
And German finance minister Olaf Scholz said his country could part nationalise firms to tackle the crisis.
In the US, Congress is expected to vote later today on a bill that will provide sick pay and short-term loans for those affected by the outbreak, among other measures.
US Secretary Steven Mnuchin pledged the US would use “whatever tools we need”.
In an interview with US broadcaster CNBC, he said he believed the coronavirus slowdown would be short-term and said the situation in 1987, when markets dropped some 20%, was a “much scarier time”.
“This is nothing compared to that,” he said.
Stock markets have been in turmoil in recent weeks with investors deeply concerned about the economic effects of coronavirus.
On Thursday, benchmark indexes on Wall Street and in the City of London saw their steepest daily falls since so-called Black Monday in 1987. In France and Germany, indexes lost more than 12%.
Those declines came despite actions by the Federal Reserve and European Central Bank to support the market.
On Friday, Japan’s Nikkei 225 index was down by more than 10% in early trading before regaining some ground to end about 6% lower.
Australia’s benchmark ASX 200 saw its biggest trading swing on record as it reversed a loss of 8.1% to end the day 4.4% higher.
Trading in India’s Nifty 50 stock index was halted for 45 minutes on Friday morning after it fell 10% and hit a “circuit-breaker” and bounced back into positive territory once trading resumed.
The Hang Seng in Hong Kong closed down more than 1%, and China’s Shanghai Composite was 1.2% lower, both off their session lows.
“There is a sense of fear and panic,” said James Tao, an analyst at stockbroker Commsec in Sydney.”It’s one of those situations where there is so much uncertainty that no-one quite knows how to respond… if it’s fight or flight, many people are choosing flight at the moment,” he added.
On Friday, the UK’s Financial Conduct Authority (FCA) prohibited short selling of a raft of shares in Italian and Spanish firms, after a request from authorities in those countries for the action, which is designed to protect that list of companies.
The prohibition on short selling came after major falls in Italian and Spanish indexes on Thursday.
Short selling is speculation that the price of a stock will go down, and if there are more short sellers than buyers, the price will be pushed down.
Firms including football clubs Lazio and Juventus were on the list, as well as luxury car manufacturer Ferrari.
Pound v dollar
Why should I care if stock markets fall?
Many people’s initial reaction to “the markets” is that they are not directly affected, because they do not invest money.
Yet there are millions of people with a pension – either private or through work – who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments.
So big rises or falls can affect your pension, but the advice is to remember that pension savings, like any investments, are usually a long-term bet.
Please include a contact number if you are willing to speak to a BBC journalist. You can also contact us in the following ways: