European stocks lick wounds after mauling, oil steady

European shares and oil prices held steady at multi-year lows on Thursday after a torrid two days that has wiped trillions of dollars off global markets.

A 3-percent slump in Chinese stocks had given Asia another bruising, so there was relief as early 0.2-0.4 percent gains for London's FTSE .FTSE, Germany's DAX . GDAXI and France's CAC 40 .FCHI pulled markets out of their nosedive.

The FTSEurofirst 300 .FTEU3 hit its lowest since October 2014 on Wednesday and the MSCI all-world country index .MIWD00000PUS was at its June 2013 low. Oil prices, down more than 25 percent this year, have been one of the main drivers of the cross-asset rout, were also steadier at $27.60 for Brent LCOc1 and $28.15 for WTI CLc1.

The European Central Bank ( ECB) meets on Thursday and is expected keep already record low interest rates on hold. Traders will be watching closely to see what impact the latest market turmoil is having on the bank's decision makers. "Europe is holding up a bit better which is welcome considering Asia equities continued to trade lower," Societe Generale strategist, Alvin Tan, said.

"For one thing, oil is not exactly rallying but at least it is holding on, and we have the ECB meeting today which is a big event, so I think people are just being a bit more restrained."

With nerves still fragile and risk appetite low, the strain continued to show on euro zone periphery bonds. Portuguese 10-year yields rose 6 basis points (bps) to 3 percent PT10YT=TWEB, pulling the gap with German equivalents to its widest since October 2014.

In Italy, with yields up 3 bps at 1.69 percent, the gap was the widest since August last year.

In emerging markets the tensions were even more intense. Russia's rouble RUB= tanked more than 3 percent as it set a record low against the dollar for a second day running. China stocks .CSI300.SSEC also ended down 3 percent after a volatile session there. That in turn sent MSCI's broadest index of AsiaPacific shares outside Japan .MIAPJ0000PUS to a new 4-year low. Japan's Nikkei average .N225 ended down 2.4 percent, adding to its 3.7 percent plunge in the previous session.