LONDON: Stocks and oil markets recovered slightly Thursday, following on from the previous day's hammering on global trade war worries.
Investors remain on edge about a damaging standoff between the United States and China, with US President Donald Trump threatening tariffs on a further $200 billion of Chinese goods.
The EU on Thursday slashed its own growth forecast for the eurozone in 2018, warning that the rising trade tensions with Washington were hitting the economy.
The European Commission, the EU's executive arm, said the 19-country single currency bloc would expand by 2.1 percent in 2018, lower than the 2.3 percent forecast just weeks ago in early May.
Around 1100 GMT, London's benchmark FTSE 100 stocks index was up 0.8 percent compared with Wednesday's close.
In the eurozone, Frankfurt's DAX 30 rose 0.6 percent and the Paris CAC 40 won 0.7 percent.
"Many agree that tariffs will ultimately be bad for the global economy, and therefore markets, but there still seems to be some hope that common sense will prevail and a full blown trade war will be averted," noted Craig Erlam, senior market analyst at Oanda trading group.
Earlier, Tokyo ended more than one percent higher and Hong Kong added 0.6 percent.
Japan's Nikkei has been given an extra nudge by a weaker yen, which helps the country's exporters.
Despite the currency's popularity as a haven investment, the yen is at a six-month low against the dollar, which is winning support from a robust US economy.
The Federal Reserve is "more concerned about the (US) economy overheating right now than the prospect of a trade war", Erlam added.
Strong US economic data suggest that Washington is in a much stronger position to fight a trade war with China, which is battling slowing growth and a crippling debt mountain among other things.
"Even though concerns remain over US-China trade frictions, the dollar remains stronger (against the yen) as traders believe there will be a political settlement at some point to avoid an all-out trade war," FX Prime trader Marito Ueda told AFP.
- Oil markets recover -
Elsewhere on Thursday, shares in Chinese telecoms equipment maker ZTE cruised 25 percent higher as the company moved a step closer to having US sanctions lifted by signing an agreement to put $400 million in escrow to cover any future violations.
The move comes after it agreed to pay a $1 billion fine and make the escrow placement in return for the lifting of a seven-year ban on US firms selling to it, which had put in on the edge of collapse.
On oil markets meanwhile, both main contracts rose after being sent into freefall.
Brent on Wednesday dived almost seven percent in value and WTI shed five percent.
The selling was fanned by news that major producer Libya had resumed exports from four eastern ports following a disruption caused by clashes in the war-torn country.
Rising global oil supply, driven by crude giants Saudi Arabia and Russia, may meanwhile come under pressure as a number of key producers face disruptions, the International Energy Agency said Thursday.
- Key figures at 1100 GMT -
London - FTSE 100: UP 0.8 percent at 7,650.44 points
Frankfurt - DAX 30: UP 0.6 percent at 12,492.71
Paris - CAC 40: UP 0.7 percent at 5,390.04
EURO STOXX 50: UP 0.5 percent at 3,439.67
Tokyo - Nikkei 225: UP 1.2 percent at 22,187.96 (close)
Hong Kong - Hang Seng: UP 0.6 percent at 28,480.83 (close)
Shanghai - Composite: UP 2.2 percent at 2,837.66 (close)
New York - Dow: DOWN 0.9 percent at 24,700.45 (close)
Euro/dollar: DOWN at $1.1658 from $1.1700 at 2045 GMT
Pound/dollar: DOWN at $1.3186 from $1.3205
Dollar/yen: UP at 112.60 yen from 112.01 yen
Oil - Brent Crude: UP 87 cents at $74.27 per barrel
Oil - West Texas Intermediate: UP 50 cents at $70.88