Markets stabilised somewhat on Friday.
The STOXX Europe 600 fell 1.2 percent. However, the S&P 500 ended the day up 0.3 percent.
The Federal Reserve's expected tapering of bond purchases remained in investors' minds. US Treasury 10-year note yields rose past 2.5 percent for the first time in 22 months.
Earlier in the day, the MSCI Asia Pacific Excluding Japan Index fell 0.8 percent but the Nikkei 225 gained 1.7 percent. The wider MSCI Asia Pacific Index ended little changed after having earlier fallen by 1.5 percent.
Helping to stabilise Asian markets on Friday was a fall in interbank rates in China. The People's Bank of China reportedly injected funds into several banks to relieve the credit crunch.
However, credit looks likely to remain tight in China.
“Recent action by the PBoC reflects the government's determination to take aggressive action to contain financial risks,” said Zhang Zhiwei, an economist for Nomura Securities in Hong Kong. “The monetary policy stance will remain tight.”
“The (PBoC) is worried by the unsustainable growth rate of credit and is sending a message that market participants should not take for granted that they will always have access to cheap interbank loans,” Capital Economics said in a research report this week.
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