Stock Market Sell-Off Extends Further In Asia

European stock markets including the FTSE 100 (NasdaqGS: Z - news) have rallied following days of losses as investors look to snap up bargain stocks.

It was a nervous opening after Japan's Nikkei fell 2.3% by the close on Wednesday - on top of a 5.4% decline during the previous session but the FTSE was up 1.3% in mid-morning trade.

The gains were stronger on the continent after eurozone bank stocks, which have taken a hammering on capital shortfall concerns, recovered some ground.

Italy's MIB was up almost 6% at one stage while Deutsche Bank (Other OTC: DBAGF - news) stock clawed back up to 11% of losses amid unconfirmed reports of a plan to raise funds.

The damage inflicted on the Nikkei's value has been particularly hard in recent days as investors have run to the relative safety of the yen, strengthening its value against the dollar at a time of negative central bank interest rates to help back its value back.

The currency's leap has placed its export-facing companies in the stock market firing line.

Bank and mining stocks have been pummelled worldwide.

The assault on commodity and energy stocks is nothing new given the slowdown in the world economy and record oil glut holding down prices - currently at $31 a barrel.

The pressure on banks - in the eurozone in particular - is a more recent phenomenon and investors have made a stampede for the exit this year over fears of possible capital shortfalls and exposure to loans in the struggling mining sector.

The main worry, which has now taken in banking stocks worldwide, is that low interest rates coupled with the weak economic environment will hold back profits for years to come.

Investors were hoping that during evidence to US Congress on Wednesday, Federal Reserve chair Janet Yellen would signal a pullback on the expected path of US interest rate rises.

The mining-heavy FTSE 100, which is almost 9% down in 2016 so far, has also seen its bank shares come under pressure with Barclays (LSE: BARC.L - news) and RBS losing around a quarter of their respective values.

It has been worse for many of their counterparts in Italy and Greece while Deutsche - Germany's biggest lender by assets - was forced to issue a statement on Tuesday insisting its balance sheet was "rock solid".

Other bank shares were among the stocks to recover some ground in Europe on Wednesday.