European shares held on to gains Wednesday after a jump in stocks on Wall Street and in Asian markets brought to an end a 10-day rout in equities.

The benchmark Europe Stoxx 600 share index was up 1.37 per cent at 235.38 points in late morning trading, as stocks began clawing back some of the massive losses run up over the last three sessions.

But underlying the sense of volatility, shares in Paris slipped into negative territory Wednesday after the downgrade of U.S. debt raised concerns about the triple AAA ratings enjoyed by European states such as France.

As the trading day came to an end in Asia, Frankfurt rebounded by about 2.5 per cent after at one point plunging about 7 per cent amid the mayhem on global markets on Tuesday.

London share market posted a modest 0.47 per cent gain, while Zurich’s SMI index gained 0.9 per cent.

The pick up on bourses came in the wake of the move on Tuesday by the U.S. Federal Reserve to declare that interest rates were on hold at close to zero for two years as part of its efforts to shore up the world’s biggest economy.

Analysts warned, however, that bourses were still dogged by considerable uncertainty and that it would take a slew of good economic news before the markets stabilized.

Once again the investor focus is on Wall Street to see how stocks open on the world’s biggest share market after the Dow posted its biggest one-day rise this year of 3.98 per cent on Tuesday.

Fears that the international economy could slide back into recession, combined with worries about Europe’s debt crisis, in recent days sparked the biggest falls in some markets since the financial crisis in 2008.

With growth worries having eased, the price of oil jumped by 3.9 per cent to rebound past the 80 dollar-a-barrel mark.

Underlying the fragile state of markets, however, the Stoxx index 600 is down more than 9 per cent on the week.

The sense of uncertainty also kept gold and other safe haven investments at close to record highs. Gold rose by 0.5 per cent to 1,753 dollars an ounce in morning European trading.

In the meantime, shares in Tokyo closed up more than 1 per cent, while the Shanghai composite index finished the day 0.92 per cent higher.

The mood was more buoyant in Hong Kong and Sydney where markets rose 2.34 per cent and 2.64 per cent respectively.

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