In the Merchant of Venice, is Shylock given mercy?

To the modern mind, Shylock has been treated very unjustly. He has lost his daughter to a man who may have been as motivated by greed for the money she brings as by love. Shylock is sentenced to the complete loss of his fortune. Gratiano remarks "thou hast not left the value of a cord" (IV, I, 366), meaning that Shylock is left so poor that he cannot afford a rope (the means to commit suicide by hanging himself). Antonio, remarkably forgiving, intervenes on the side of mercy, which has been a major theme of the trial scene. He petitions the Duke to allow Shylock the use of half his fortune for his life on two conditions: that he leave it to his son-in-law and daughter on his death and that he convert to Christianity.
The second condition is especially outrageous to the modern audience, since modern governments are expected to respect freedom of conscience. However, Shakespeare was writing for an audience that generally had no doubt that Christianity was the only true religion and the means for salvation. Remember that there would have been few or no open Jews, Muslims, Buddhists, or avowed atheists in the audience. For this audience, forcing a man to change his faith would have been seen as similar to forcing a person to undergo a medical treatment that would save his life. In the eyes of most people living in Elizabethan England, Shylock, providing he abides by the faith that he is forced to adopt, has been given the gift of eternal life.

Other than being spared from the execution proposed by Portia, Shylock is not offered mercy in The Merchant of Venice, and in fact is humiliated both personally and in business during the course of the play. Shylock's interest-free loan to Bassanio requires the grotesque payment of a pound of Antonio's flesh if left unpaid, and, although these terms demonstrate Shylock's moral depravity, his desire for vengeance is the direct result of Antonio's targeted antisemitism. Both characters behave undesirably towards each other, yet Shylock is vilified while Antonio is supported.
After the trial, Shylock is not only denied repayment of the original sum, but is punished for threatening the life of a Venetian, even though Antonio willingly agreed to the terms of the loan. Antonio is legally awarded half of Shylock's fortune, and Shylock may designate the other half to his daughter Jessica and her husband Lorenzo if he converts to Christianity as she has. Shylock unjustly experiences religious persecution, betrayal by his only daughter, and financial ruin at the hands of the other characters, which seems particularly cruel and unmerciful in the context of this play, when so many other characters are spared from heartache.