European equities steadied on Thursday after slumping in the previous session following a rout in commodities prices, with a strong rally in shares of companies such as Pearson and Logitech underpinning the market.

Sentiment remained fragile as initial gains on Asian stocks fizzled out, with a further drop in crude oil prices seen maintaining downwards pressure on world markets.

The pan-European FTSEurofirst 300 index was flat in percentage terms at around 1,267 points after rising up to 1,282.49 points earlier in the session. It fell 3.3 per cent to its lowest level since October 2014 in the previous session.

The Iseq index was trading marginally higher in Dublin this morning, up just 11 points to 6,185.16.

Shares in Pearson surged more than 10 per cent after the British education publisher announced plans to cut 10 per cent of its workforce, cap its dividend and restructure after cutting earnings forecasts for 2015 and 2016.

“Whilst it is disappointing to see further restructuring costs and little, if any, improvement in underlying markets, we are broadly encouraged that Pearson has decided to redouble its efforts to meet external and internal challenges,” Roddy Davidson, analyst at Shore Capital, said. “We believe the market will also be relived by its decision to maintain dividends at 2015 year levels.”

Swiss-American technology accessories maker Logitech also jumped 8.9 per cent after its quarterly results beat analyst forecasts. However, Deutsche Bank fell 6 per cent after saying it expected a net loss of €6.7 billion for 2015 due to writedowns, litigation charges and restructuring costs. The announcement by Germany’s biggest bank has renewed concerns that it will now need to raise new capital to strengthen its finances.

The market awaited a meeting of the European Central Bank, which is expected to keep interest rates on hold but highlight increasing growth and inflation risks, raising the prospect of further policy easing later this year.

Investors have been concerned about the pace of global economic growth in the wake of a growth slowdown.

US investment bank Citigroup cut its growth forecasts for the world economy.

“Risks to our growth forecasts probably remain to the downside, with increasing risks of global recession,” Willem Buiter, global chief economist at Citi, wrote in a note.

Earlier, Asian shares and the dollar surrendered their gains on Thursday as recently volatile crude oil prices seesawed lower, although European shares were still expected to mark opening gains.

S&P500 e-mini futures were down about 0.6 per cent in late Asian trade. On Wall Street overnight, an uptick in US crude oil from 2003 lows helped major indexes pull away from losses of more than 3 per cent, but they still finished more than 1 per cent lower.

Crude oil succumbed to added pressure on prices and its losses continued on Thursday.

The new front-month US March oil futures contract was down 0.7 percent at $28.15 a barrel, giving up an earlier rise. Brent crude dropped 0.6 percent to $27.72 in Asian trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan erased early solid gains and teetered in and out of negative territory in afternoon trade. It was last down 0.5 per cent.

Japan's Nikkei average ended down 2.4 per cent, adding to its 3.7 per cent plunge in the previous session.

The Shanghai Composite Index slipped 0.9 per cent, while China’s bluechip CSI300 index was down 0.8 per cent. It has lost around 15 per cent since the beginning of the year.

David Dai, Shanghai-based investor director at Nanhai Fund Management Co, said fears of a prolonged bear market were, nevertheless, overdone.

“With stocks having fallen so much, much of the risk has been priced in and another free-fall is quite unlikely, although the chance of a sustainable rebound is slim,” he said.

The dollar index, which tracks the US unit against a basket of six counterparts, was down about 0.1 per cent at 99.013.

The dollar turned back toward a one-year low against its perceived safe-haven Japanese counterpart on Wednesday.

The dollar shed about 0.1 per cent to 116.75 yen after falling to 115.97 on Wednesday, undermined by US data.

US consumer prices unexpectedly fell in December, suggesting inflation was more sluggish than the S Federal Reserve believed.

Other Wednesday data showed a drop in housing starts and building permits last month, which led investors to pare expectations of further interest rate hikes this year.

The euro edged up about 0.1 per cent to $1.0893, ahead of the ECB meeting later in the session.

Reuters