The ASX has followed Wall Street's lead and rebounded with a 1 per cent gain in early afternoon trade.
After a wild night where key US stocks swung from red to black over a 5 per cent range, the benchmark S&P500 index ended the session up 1.7 per cent.
Locally investors sprung out of the blocks looking for bargains, with the ASX200 up around 1.7 per cent in the first half hour, but sentiment cooled throughout the morning.
All key sectors showed gains, with miners leading the way up 2.4 per cent while energy stocks regained some allure, (+2.3 per cent).
Banks and financial stocks were up a more modest 1.2 per cent, dragged by CBA slipping into the red on weaker-than-expected first half results.
The broad church of industrial stocks was up more than 2 per cent, while interest rate-sensitive utilities lagged the field (+0.4 per cent).
Key stocks (at 1pm AEST):
- CBA -0.3pc
- Westpac +1.1pc
- BHP +2.8pc
- Woolworths +0.7pc
- Telstra +0.6pc
While the rebound has a semblance of calm as bargain hunters move in, a pall of fear hangs over the market.
Wall Street's VIX index — or "fear index" — retraced around 20 per cent overnight, but still indicates investors are looking to cut their risk in coming weeks, which would drive equity markets down again.
The early gains added around $24 billion to the ASX, which shed more than $90 billion in the previous two days.
Overall, global markets have dropped around $US4 trillion in value in the past week and half.