Terror in the U.S. brought tumult to Asian markets overnight, but European markets rebounded from opening lows as hopes for a speedy recovery spread across the Continent.

While London's FTSE 100 dropped by 62 points to 4684 at the open, a new 35-month low, the few traders in a thin market seemed resolved to gain strength through evil. At the close, the FTSE was up 2.8%, closing at 4882.

Continental markets also bounced back as trading came to a close. In Frankfurt, the Dax slumped more than 50 points at Wednesday's open and lost 1.5% early, but the index recovered to post a 1.8% gain to end the day at 4353.

In Paris, the CAC 40 slipped 3% at the open but also recovered. The French index closed at 4114, up nearly 55 points, or 1.3%.

Most European exchanges suspended trading in most U.S. equities Wednesday. All European markets halted trading at 8:45 a.m. EDT, near the time of Tuesday's first World Trade Center crash, to observe a moment of silence for the victims.

Pharmaceutical companies helped lead the advance. GlaxoSmithKline jumped 11% in London trading, and Aventis, the biggest French drugmaker, gained 7.3% in Paris. Investors perceived drugmakers to be largely unaffected by the hostilities.

Conversely, airline stocks took a hit. Air France declined 10% on top of Tuesday's 16% decline. Both British Airways and Lufthansa closed marginally lower, on top of double-digit losses the day before.

Insurers also lost ground on fears that many may have written policies for companies destroyed in Tuesday's carnage in New York. At first glance, experts suggest the damage from the assault could exceed $15 billion. European insurance giant Aza lost more than 6.3%, and French reinsurer Scor was down nearly 15%.

Scor estimates its exposure to the bombings at between $150 million to $200 million. The French insurance giant also said its 120 employees housed in the World Trade Center complex are accounted for.

Asian Markets Slump

Markets in Asia and the Pacific Rim opened sharply lower, but unlike Europe, never regained their footing as several rally attempts failed.

Tokyo's Nikkei closed with a loss of 6.6% at 9610, the lowest level since 1983 and the first time in 17 years that the Japanese benchmark has dropped below the 10,000 level. Major exporters like Toyota posted daily limit losses.

In Hong Kong, the Hang Seng also slipped below the 10,000 level, trading down 8.9% to 9494. Again, major exporters and firms with U.S. exposure led the decline, with Cathay Pacific Airways losing nearly 17%, bank and investment firm HSBC Holdings dropping 7.8% and Johnson Electric Holdings, a manufacturer of small electric motors and with major U.S export accounts, slumping 14.4%.

Other Asian markets followed suit. In Singapore, the Straits Time Index closed down 7.4%. The All Ordinaries Index in Australia was down 4.1%, and the Korean Kospi Index dropped 12% to 476. Exchanges in Taiwan and Malaysia remained closed Wednesday.

Traders across Asia and Europe came to work Wednesday aware that the chilling tragedy in the U.S. would jolt the world and, hence, the markets.

"The world has changed after this," Louie Bate, managing director of ING Barings Securities (Philippines), told Reuters. "Spending, travel and trade will change. People in the United States might not spend as much, and we were counting on that for a recovery."

Dollar Improves, as Oil, Gold Give Back Gains

With U.S. central bankers asking foreign exchanges to limit trading of the dollar and central banks adding liquidity to fragile markets, thin trading and support helped the U.S. currency to recover from Tuesday's losses against European currencies.

Crude oil moderated after a sharp spike in the aftermath of Tuesday's terror. October Brent Crude, which traded as high as $31 per barrel Tuesday before settling back. In late London trading Wednesday, the October contract traded at $28.02, off $1.06.

Concerns over supply disruptions lessened as OPEC pledged to continue oil production and delivery Tuesday. And, in the wake of Tuesday's carnage, analysts are now focused on the potential for demand declines in the U.S.

There appears to be no threat of oil shortages, and the American Petroleum Institute said Tuesday that gasoline supplies were adequate to meet U.S. demand. Nevertheless, some gasoline stations are capitalizing on the moment, as some Midwestern gas stations were posting prices of $4 a gallon by late Tuesday.

Oil stocks followed oil prices lower in Europe. BP Plc lost 4.8%, and Shell lost 5.7% as the market closed.

Gold also gave back Tuesday's gains. Historically considered a safe haven in times of international turmoil, gold pushed as high as $290 an ounce Tuesday. In late London trading Wednesday, gold traded at $278.50.

Americas Markets Mostly Shuttered

Most North American markets were closed, following New York's lead in the wake of the tragedy. Both Canadian and Mexican markets are closed Wednesday, with word of Thursday's plan for trading expected to be released shortly.

In markets that are open for trading, results were mixed. At midday, the Brazilian market was up 4.3%, while the Venezuelan market was off 2.2%.

Most markets in the Americas are expected to take further trading cues from the New York Stock Exchange because many of the issues are co-listed and gain significant liquidity from U.S. markets.

Christopher S. Edmonds is president of Resource Dynamics, a private financial consulting firm based in Atlanta. At time of publication, neither Edmonds nor his firm held positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While Edmonds cannot provide investment advice or recommendations, he welcomes your feedback and invites you to send it to Chris Edmonds.

More from Markets

Dow Set to Snap 8-Day Losing Streak as Stocks Recover, But Trade War Lingers

Dow Set to Snap 8-Day Losing Streak as Stocks Recover, But Trade War Lingers

Dow Sinks for Eighth Straight Session; Intel's CEO Departs -- ICYMI

Dow Sinks for Eighth Straight Session; Intel's CEO Departs -- ICYMI

Dow Logs Eighth Straight Drop as Stocks Slump

Dow Logs Eighth Straight Drop as Stocks Slump

This Is What's Hot Thursday - Stocks Slide, Intel's CEO Woes & Major Movers

This Is What's Hot Thursday - Stocks Slide, Intel's CEO Woes & Major Movers

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks

U.S. Banks Pass Fed 'Stress Test' With Room for Dividends, Buybacks