In Asia, the Shanghai Composite Index slid 8.5% and Hong Kong’s Hang Seng Index fell 5.8%, tumbling further into a bear market.
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‘Investors must be vigilant of the Black Monday events and what has led to them.
In trading around 1130 GMT, London’s FTSE 100 index was up 3.53 percent, the CAC 40 in Paris rose 4.58 percent and the DAX 30 in Frankfurt climbed 4.28 percent.
Britain’s top share index posted its biggest one-day rise since 2011 on Tuesday after China cut interest rates to calm markets, following turbulence that has rocked equities globally.
The Stoxx Europe 600 rose 1.4% to 346.89, with all sectors trading higher, led by the basic materials and oil and gas groups, which have overall been beaten down over the course of 2015.
Positive economic data from the eurozone helped give investors more confidence in returning to the region; Germany’s second-quarter GDP report showed that the nation’s economy expanded 0.4 percent in the second quarter.
“There is as much a case for the accelerator as there is for using the brakes”, Summers said.
The DAX, one of the biggest gainers at the start of the year, will be among the most hit due its exposure to China, Woischneck said.
Goldman Sachs has reduced its three-month outlook for the FTSE to 6,000 points from 6,900 points, although it believes the global economy is not at risk of recession.
China’s slowing economy and the depreciation of the yuan as well as plunging commodity prices and fears over the timing of the next US interest rate hike have all contributed to the sell-off.
But unlike in July, when Beijing directed hundreds of billions of dollars into the market in an unprecedented rescue operation, policymakers have largely sat on their hands during the latest bout of turbulence, which began last week.
Nicholas Teo, market analyst with CMC markets warned in a note that China’s slumping economy could dash hopes for a global recovery.
“The bigger picture is that the source of the stresses we’ve had are coming from the fact that China needed to ease policy more”.
Countries heavily exposed to China’s slowing economy have tried to soothe fears about the prospect of a global downturn. The measure is about 25% below an April high, with a gauge of price momentum dropping to the lowest since the October 1987 stock-market crash.
Tony Cross, market analyst at Trustnet Direct, said: “The FTSE 100 has bounced out of the starting blocks as Tuesday’s session gets under way with some evidence of bargain hunters jumping in although the gains are looking somewhat tempered”.
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“There were expectations of some sort of action from the Chinese central bank overnight and markets are likely to remain on edge for some action, either in the form of a rate cut or a cut in the reserve ratio for banks“, said Simon Smith, chief economist at FxPro.
