The top gainers were gold stocks, with some rising as much as 8%.
Wall Street finishes sharply down.
US investors continued to sell on Thursday as stocks were decimated by recession fears, the dollar's grip on currency markets barely loosening, and bonds continued to be hurt by rising interest rates.
Following a slight recovery on Wednesday, US stocks plunged overnight.
The S&P 500 lost 2.1%, setting a new low for 2022, and the Nasdaq Composite fell 2.8%, hurt by major technology companies like Apple and Amazon. The Dow Jones Industrial Average dropped 1.5%.
While the markets for European government bonds prepared for the highest German inflation reading since the 1950s, talk of currency intervention in China was also gaining steam.
A day after the Bank of England (BoE) dramatically intervened to try to calm the storm surrounding the British government's new spending plans, gilt selling also picked back up.
Portfolio manager at Thornburg Investment Management in Santa Fe, New Mexico, Sean Sun, described the bad news for investors as "a pick-your-poison collection."
Investors have few places to hang their hats as a result of the turmoil in the UK stock and bond markets, the turmoil caused by the Fed's decision to become more hawkish, China's intervention to support the yuan, and the growing geopolitical issues.
The UK wants stability
Following the BoE's unexpected intervention the day before, the UK 10-year gilt yield, which determines the country's borrowing costs, increased by about 8 basis points to 4.214 percent; however, the BoE's target 30-year yield didn't change much and remained at 3.96 percent.
Agnes Belaisch, the head of European strategy at Barings Investment Institute, said: "Some stability would be welcome by the market. Considering that it has grown somewhat unpredictable."
She claimed that investors were now observing "incoherence" in Britain, where the BoE is trying to control inflation by increasing government spending, while attention is being paid to how high central banks are willing to raise interest rates elsewhere.
New British Prime Minister Liz Truss defended her new economic plan, which this week sent the pound to a record low and brought the UK's borrowing costs close to those of Greece. She claimed that the plan was created to address the challenging circumstances that Britain was currently facing.
On the local BBC radio, Ms. Truss stated, "We are experiencing challenging economic times."
"I do not dispute this. This is an international issue. But the UK government's intervention and subsequent action are wholly appropriate."
"The CBOE VIX Index, a gauge of Wall Street's expectations for volatility, increased by 6.5%, though it is still below levels from earlier in the week."
Keeping inflation under control
Returning to a wider perspective, the topic remained the dollar, which has decimated currencies worldwide this year, as well as the consequences of Russia's invasion of Ukraine.
Charles Evans, a veteran member of the Federal Reserve's policymaking committee, made no mention of the recent turmoil on the bond and foreign exchange markets when he spoke with reporters in London on Wednesday.
Mr. Evans supported raising the Fed's rates, which are currently at a range of 3% to 3.25 percent, to a range of 4.5 percent to 4.75 percent by the end of the year or in March. "We just really need to get inflation in check," he said.
On Thursday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, echoed that sentiment by stating that she did not perceive any distress in the US financial markets that would change the Fed's strategy.
Such remarks pushed the yield on US government bonds higher.
The 10-year Treasury note yield increased by 6.5 basis points to 3.772%, while the yield on 30-year Treasury bonds increased by 2.9 basis points to 3.7102%.
Following its worst session in two and a half years on Wednesday, the US dollar index, which measures the currency against its peers, hovered around its recent, 20-year high again on Thursday.
"Though inflation benefits are modest, trade-weighted dollar strength is consistent with generally tighter financial conditions and in line with Fed objectives."
China's yuan also fell overnight, though it managed to hold off recent post-financial crisis lows as the central bank of that country declared that stabilizing the foreign exchange market was one of its top priorities and amid rumors of potential FX intervention.
The day's trading was essentially flat for MSCI's largest index of Asia-Pacific shares outside of Japan, though Japan's Nikkei managed to gain close to 1%.
The US's tight labor market was demonstrated by the unexpected drop in weekly jobless claims, which defied expectations.
According to the government's third estimate of GDP, the US economy shrank at an annualized rate of 0.6% in the most recent quarter. The first quarter saw a 1.6% rate of economic contraction.
Even as OPEC+ started talking about reducing oil output, the price of oil continued to fall as the stronger dollar and gloomy economic outlook continued to weigh on the market.
The price of Brent crude oil fell by 0.9% to $US88.49 at the day's end.