Nervous investors sold European and Japanese stocks and generally shunned the dollar this afternoon amid worries over the financial impact of the slumping US housing market.
The FTSEurofirst 300 index of top European shares was down 0.4 per cent, off its lows. Japan's Nikkei closed 0.46 lower.
But emerging markets stocks managed to recover from earlier losses to trade flat, and Wall Street looked set for a positive start after higher-than-expected profits at retailing giant Wal-Mart kindled optimism.
The price of oil, which has been causing concern as a threat to economic growth, eased. Gold was flat at around $803 an ounce after earlier slipping as low as $790.80.
Investors have been pulling money out of riskier assets this month as the US economy slows and the fall out from the credit crisis continues.
MSCI's main world stock index is down 4.9 per cent in November and its emerging market counterpart has lost 7.2 per cent.
UBS said risk aversion among equity investors had turned "extreme", according to its in-house gauge, hitting levels not seen for two months.
The investment bank's latest risk report also showed growing risk avoidance among fixed income investors and on foreign exchange markets.