Stock markets stabilised and bonds fell in Europe this morning but investors fumbled for direction in the wake of attacks on the United States which many feared would prompt a global recession.
Safe haven bonds and gold lost ground, returning some of the massive gains made yesterday after two hijacked passenger planes ripped into the 110-storey twin towers of the World Trade Center in New York, triggering huge blasts that ripped through a key nerve centre of global finance.
Oil, which had also made major gains on fears of worsening conflict in the Middle East, was steady.
The dollar was stable after large losses against major currencies yesterday.
Europe's bourses fell sharply then steadied today as investors tried to work out the implications for economic and political life.
Dealers predicted a day of huge volatility while benchmark indices yo-yoed around end 1998 levels after first approaching lows last seen during the Russian devaluation crisis in the autumn of that year.
By 8.35 a.m. the pan-European FTSE Eurotop 300 was up 0.8 per cent after initially shedding more than two per cent, while the DJ Euro Stoxx 50 ticked up 0.2 per cent.
The FTSE index in London rose 1.2 per cent after initially hitting a new three-year low, while in Paris the CAC-40 clawed back above the 4,000 mark after falling nearly five percent at the open.
"This is a price mark-down to reflect the worst possible case," said Mr Michael Hughes, chief investment officer at Baring Asset Management in London, speaking of the past 24 hours.
The worries that people have are the oil price and what is going to happen to consumer confidence in the US.
Economists have predicted that the attacks, which have had a huge impact on the value of financial assets and will leave a staggering recovery bill, will plunge the US economy, already teetering on the brink, into recession.
Tokyo stocks tumbled to 17-year lows as the key Nikkei stock average fell 6.63 per cent to close at 9,610.10, breaching 10,000 for the first time since August 1984.