* Shares end lousy quarter on high note
* Glencore (LONDON:GLEN) up 10 percent
* Deflation stalks euro zone again
By Jamie McGeever
LONDON, Sept 30 (Reuters) - Stocks ended the most bruising
quarter in four years on a high note on Wednesday, with a
rebound led by the shares most exposed to the global economic
slowdown and commodities rout that have rattled investors in
recent days.
It was a similar pattern in foreign exchange, where emerging
market currencies, having been crushed to historic lows, rose
against the dollar.
The spectre of deflation in the euro zone reappeared,
however. Consumer prices fell across the 19-nation bloc in
September, adding pressure on the European Central Bank to
inject more policy stimulus sooner rather than later.
Around midday in Europe, the FTSEuroFirst 300 index of
leading European shares and Germany's DAX .GDAXI were up 2.5
percent at 1,370 points .FTEU3 and 9,678 points, respectively.
France's CAC 40 rose 2.7 percent.
Shares in mining and trading firm Glencore, which plummeted
on Monday along with commodity prices, jumped 10 percent after
it sought to reassure investors over its debt situation. They
had risen 17 percent on Tuesday. ID:nL5N11Z2Y0
Britain's FTSE 100 was up 2.2 percent .FTSE , and U.S.
stock futures pointed to a rise of more than 1 percent at the
open on Wall Street ESc1 .
"The market was squeezed and this is facilitating a rebound
... although it's too early to say if risk appetite has
returned," said Ifigest fund manager Roberto Lottici.
Analysts at Daniel Stewart & Co noted that even after the
third-quarter weakness, stock valuations still look high, so
investors should brace for a difficult fourth quarter, too.
"This reinforces our current view that most equity indices
are more likely to fall at least in the short-term rather than
bounce back to new record highs," they said in a client note on
Wednesday.
The FTSEuroFirst is on track to lose almost 10 percent in
the third quarter, the biggest since a 17 percent decline four
years ago in the depths of the euro zone crisis.
Earlier in Asia, MSCI's broadest index of Asia-Pacific
shares outside Japan .MIAPJ0000PUS rose 1.8 percent. It had
reached its lowest since June 2012 on Tuesday on fears that
China's economic slowdown would curb the country's huge appetite
for commodities and resources.
The index was on track for a 17.5 percent loss in the
quarter, also its worst performance in four years.
Japan's Nikkei .N225 brushed aside an unexpected drop in
the country's industrial output to close up 2.7 percent, paring
losses for the quarter to 14.1 percent, its deepest since 2010.
2.4 TRILLION EUROS QE?
Annual euro zone inflation in September was -0.1 percent,
turning negative for the first time since March and adding
pressure on the ECB to extend and expand its quantitative easing
programme of bond purchases.
This prompted one of the boldest ECB forecasts to date from
analysts at Standard & Poor's.
"We believe the ECB will extend its QE program beyond
September 2016, most likely until mid-2018, and that it could
reach 2.4 trillion euros - more than twice the original 1.1
trillion commitment," they said in a note.
The inflation data helped keep the euro under pressure. It
was last down 0.3 percent at $1.1215 EUR= , and two-year German
bond yields were little changed at -0.245 percent.
Demand for the safe-haven yen eased as stocks steadied. The
dollar rose to 120.25 yen JPY= , up 0.4 percent on the day and
a full yen from the day's low of 119.24.
Yields on U.S. Treasury bonds rose. The 10-year yield was up
4 basis points to 2.09 percent US10YT=RR as comparable German
yields were little changed.
Emerging market currencies fared better against the dollar.
South Africa's rand rose 1 percent, although it was still
on track for a quarterly loss of 14 percent, its 14th in
succession.
Zambia's kwacha, which had hit a record low on concerns
about Glencore and falling copper prices, rebounded around 2
percent.
Benchmark three-month copper on the London Metal Exchange
CMCU3 rose 1.7 percent to $5,057 a tonne, compared with a
six-year low of $4,855 hit in August.
Prices of other industrial metals, including aluminium
and zinc, also halted recent slides.
Crude oil futures were slightly lower, however. U.S. crude
CLc1 fell 0.3 percent to $45.11 a barrel and Brent slipped 0.2
percent to $48.12.