What you need2know

SPI futures up 42pts or 0.9% to 4752 at 7am Sydney time

AUD +0.4% at 70.95 US cents, 80.97 Japanese yen, 63.06 Euro cents and 48.94 British pence

On Wall St, at about 2.30pm, Dow up 0.15%, S&P +0.88%, Nasdaq +1.52%

In Europe, Stoxx 50 +1.9%, FTSE +0.7%, CAC +1.6%, DAX +1.6%

In London, BHP -1.9%, Rio +0.8%

In Frankfurt, Deutsche Bank +10%

Spot gold +0.3% to $US1193.20 at 2.53pm New York time

Brent crude +1% to $US30.62 at 2.27pm New York time

US oil -2% to $US27.38 at 2.27pm New York time

Iron ore untraded at $US45.73 per tonne

What's on today

Local earnings: ASX, Cochlear, Goodman Group, Impact Minerals, Mirvac Group, Nick Scali, Rio Tinto, Sedgman, Suncorp Group, Tamawood, Tassal Group, Transurban Group, Virgin Australia.

US weekly jobless claims. Central bank meetings in Sweden, Chile, Peru. The World Gold Council releases 2016 bullion demand report. Earnings: Reynolds American, PepsiCo, Molson Coors Brewing, Kellogg, American International Group, CBS, Dun & Bradstreet, Thomson Reuters, Zurich Insurance Group, Mediobanca, Shire, L'Oreal, Total SA, Pernod Ricard, Societe Generale, Nokia Oyj.

Currencies

The Bloomberg Dollar Spot Index was little changed after two days of declines. The yen climbed 0.9 per cent to 114.064 per US dollar, reaching the highest level since 2014.

Japan's currency has climbed against almost all of the more than 150 currencies tracked by Bloomberg since the central bank embraced negative interest rates on January 29. The prospect of the Bank of Japan either stepping in to sell yen or cut interest rates is a growing risk, HSBC Holdings says.

South Africa's rand and Russia's rouble were among the biggest gainers in emerging markets as a Bloomberg gauge of 20 developing-nation currencies rose for the first time in four days. The rand strengthened 1.4 per cent and the rouble and Malaysia's ringgit rallied at least 0.8 per cent.

Commodities

Iron ore capacity cuts driven by slumping prices have yet to swing the global market to a deficit as the world's biggest producers keep on adding supply, according to Morgan Stanley, which projects that a glut will endure to at least 2020. Ore with 62 per cent content delivered to Qingdao was at $US45.73 a dry ton on Wednesday, according to Metal Bulletin. The global seaborne glut is estimated at 45.8 million tons this year, 34.1 million tons in 2017 and 68.2 million tons in 2018, the bank said in the report. Morgan Stanley forecasts that prices will average $US46 a ton this year, $US45 a ton next year and $US48 a ton in 2018.

Saudi Arabia's King Salman plans to visit Moscow in mid-March, RIA news agency reported on Wednesday, citing Kremlin aide Yuri Ushakov. Ushakov said an agenda for the visit had not yet been decided.

US shale oil production will double over the next 20 years as drillers that became more efficient amid a slump in oil prices unlock new resources, British energy giant BP said. In its industry benchmark 2035 Energy Outlook, BP forecast global demand for energy to increase by 34 per cent, driven by growth in the world population and economy, with the share of oil declining in favour of gas and renewables.

United States

The Standard & Poor's 500 Index pared its first gain in four days as commodities producers faded in afternoon trading. Equities rebounded from a two-year low as Yellen signalled the Fed has an eye on volatility that could delay rate increases.

The S&P 500 climbed 0.6 per cent at 2.46pm in New York. Equities rose as much as 1.5 per cent before fading amid testimony from Yellen that included her saying that market fears of a recession are showing up in asset prices.

Yellen's comments reflected a concern that has hung over equity markets all year: whether the evaporation of wealth in share prices could bleed into the economy, sour consumer confidence and restrain spending. Almost $US3 trillion of equity value has been erased as declines in the S&P 500 swelled to as much as 9.4 per cent this year.

Europe

Deutsche Bank shares jumped the most in almost seven years and credit risk fell as Germany's biggest bank considers a bond buyback to help ease investor concerns about its funds.

A measure of banks posted the best performance of the 19 industry groups on the Stoxx Europe 600 Index, with Deutsche Bank jumping 10 per cent. Commerzbank climbed 8.6 per cent. Italy's Banca Popolare di Milano Scarl and Intesa Sanpaolo gained at least 11 per cent.

"When it feels this bad, it's usually a good buying opportunity," said Kevin Lilley, who manages European equities at Old Mutual Global Investors in London. His firm oversees about $US32 billion. "Valuations look cheap for financials."

The Stoxx 600 advanced 1.9 per cent to 315.13 at 4.30pm in London, paring gains of as much as 2.9 per cent, but still snapping a seven-day losing streak. A gauge tracking European stock swings fell from its highest in three weeks, although it has still jumped 49 per cent this year. The volume of Stoxx 600 shares changing hands was 38 per cent higher than the 30-day average

What happened yesterday

The Australian sharemarket has plunged into a bear market in a second day of heavy selling fuelled by negativity in the banks, despite a solid profit result from Commonwealth Bank.

The market trimmed its losses in the afternoon but the S&P/ASX 200 index still broke through a key support level of 4800, at one point falling to 4706.7 and placing the index in an official bear market, defined as a 20 per cent fall from its recent high in April of almost 6000 points.

At close of trade the benchmark index ended 1.2 per cent, or 56 points, lower at 4775.7, while the broader All Ordinaries ended 1.2 per cent lower at 4826.5.