European shares came down to earth with a 2.1% fall on Monday after a record surge in the previous session.
The fall was due to doubts surrounding a $US700 billion rescue plan for the financial sector in the United States.
The government is pressing Congress to approve one of the costliest bailouts for financial companies since the Great Depression
Analysts have questions over the massive plan, with members of Congress calling for changes in the proposals.
The pan-European FTSEurofirst 300 index of top European shares ended 2.1% lower at 1,127.08 points after a record surge of more than 8% on Friday.
Banks took the most points off the index: HSBC fell 5.8% and Societe Generale lost 3.6%.
Across Europe: Germany's DAX ended 1.3% lower and France's CAC fell 2.3%.
In Britain, the FTSE 100 lost 1.4%, ending 75 points lower at 5,236.3 after rallying 8.8% on Friday. The index is down about 19% to date this year.
US stocks were also lower as investors worried that the rescue plan might hit a bump in Congress.
Commodity shares added most points to the index. Crude oil prices rose by $US5 to $US109.60 a barrel. BP, Royal Dutch Shell and BG jumped 1.7% - 4.4%. Copper was up 2.8%.?
NZ market up
Investors returned to the sharemarket, with the NZX 50 index closing up 69 points to 3256 on Monday on turnover of $79 million.
Telecom was up 10 cents to $2.82, while Contact Energy was up 13c to $8.70. Fletcher Building was up 34c to $7.32.
Sky City Entertainment was down 2c to $3.53, Fisher & Paykel Appliances was down 1c to $1.71 and Fisher & Paykel Healthcare was down 7c to $3.09.
The Warehouse was up 3c to $3.15, while Vector rose 6c to $2.20.
The dollar was trading at US68.65 cents, 82.63 Australian cents, 37.49 pence, 73.17 yen and 0.4731 euro. The Trade Weighted Index was 64.55.
the Australian 200 index was up 201 points, or 4%, to 5001 by late Monday afternoon.
The S&P/ASX200 was up 216.4 points, or 4.5%, to 5020.5, while the All Ordinaries gained 209.4 points, or 4.33%, to 5050.1.
On the Sydney Futures Exchange, the December share price index contract was 259 points higher at 5054, on a volume of 56,009 contracts.
