European stocks bounced off seven-year lows by midday, as investors dipped toes into equities as US stock futures firmed.
Gains were broad-based, supported by equities' valuations relative to bonds. Stocks are cheaper compared with bonds than they have been for 30 years, on the basis of dividend yields.
By 11.38 a.m. the FTSE Eurotop index was up 3 per cent at 703.5 with gainers outpaced losers by a seven-to-one margin. The narrower DJ Stoxx 50 rose 3.1 per cent to 1,907.9.
€1 trillion has been wiped off the value of the benchmark FTSE Eurotop 300 so far this year, according to FTSE International; about €5.3 trillion has been wiped off the value of Europe's 600 biggest listed companies since shares peaked in March 2000, according to Bank of America.
Using the latest available data from the European Commission's Eurostat office, that is more than the combined GDP of France, Germany and Britain - Europe's three biggest economies.
Some strategists still advised caution as there were no convincing signs on Tuesday of panic selling that traditionally precedes a sustainable upturn.