European stocks pared back some of the losses on Wednesday after plunging about 8 percent earlier in the session as credit fears intensified, selling snowballed and authorities around the world scrambled to find ways to contain the crisis.
The UK government announced a rescue package for banks under which at least 200 billion pounds ($350 billion) will be made available to financial institutions, plagued by bad debts and a crisis of confidence.
But it is unclear what can soothe investors. Sellers drove the Nikkei down 9.4 percent, its biggest one-day percentage fall since the crash of October 1987.
Markets in Tokyo and Hong Kong plummeted 5 percent to 7 percent, and Jakarta tumbled 9 percent, after another gloomy session on Wall Street that saw the Dow Jones industrial average notch its biggest five-day points fall ever.
European markets were off the day's lows, with the FTSE 100 falling over 2.5 percent, Germany's DAX down more than 4.4 percent, the French CAC 40 falling 3.6 percent.
British banks HBOS surged 55 percent and Royal Bank of Scotland jumped 32 percent after heavy recent losses.
At 1038 GMT, the pan-European FTSEurofirst 300 benchmark was still down 3.7 percent at 966.44 points after trading nearly 8 percent lower early in the day.
U.S. stock index futures pointed to another day of big slides on Wall Street but were also off lows earlier in the session.
"I think for a few more days we are in a Mark Twain situation where we are more worried about the return of our money than the return on our money," Guy Monson, Managing Partner & CIO at Sarasin & Partners, told "Squawk Box Europe."
About the UK government's plan, "what we're really looking at is a giant backstop to the entire banking system," Monson said, adding that now "we have a banking system which is run directly by state guarantee".
Banks continued to get hammered, but news from other sectors of the economy was no better, with aluminum producer Alcoa reporting a lower-than-expected quarterly profit on softening demand on Tuesday after the bell, and saying it was halting major capital projects in the face of uncertain markets.
And Toyota Motor will likely post a 40 percent slide in annual profit, missing its profit estimates on weak sales in North America and slower growth in China, the Nikkei business daily reported.