Traders on the floor of the European Stock Market

BBC

European markets have bounced back again after Asian markets steadied overnight, reports the BBC.

Most major markets are between 2% and 3% higher, with London's FTSE 100 share index gaining 2.22%.

Earlier, Asian shares were mixed, with fears about the European debt crisis still preying on investors' minds.

Asian stocks pulled back from initial steep falls, with Japan's Nikkei 225 index recovering from an opening fall of 1.8% to close 0.63% lower.

Hong Kong's Hang Seng was down 0.6% - again after an earlier, larger fall.

South Korea's Kospi was up 0.62%, after dropping close to 4%. And Australia's ASX index also recouped earlier losses.

On Wall Street, late on Wednesday, the Dow Jones Industrial Average lost 4.6%, or 520.29 points to close at 10,719.48 in its fifth straight day with a rise or fall of more than 400 points.

Worries over France's credit rating and the strength of its banks were a key trigger for Wednesday's falls.

While ratings agencies Moody's, Standard & Poor's and Fitch reaffirmed France's AAA credit rating, analysts said investors remained sceptical about the country's financial health and the stability of its banking sector.

"I think there's concern about just how much Greek debt French banks really do hold and how much the European Central Bank is willing to backstop all this," said Bret Barker of TCW.