European stocks make early gains

(CNN) -- European markets made early gains Thursday morning as traders sought to bounce back following heavy losses a day earlier and European central banks offered $90 billion to the banking sector in a fresh attempt to bolster economic confidence.

Benchmark indexes across the continent crashed heavily Wednesday even as governments and central banks announced a raft of emergency measures to prop up the ailing economy, including coordinated half-point interest rate cuts and an $84 billion rescue plan for British banks.

Overnight, the European Central Bank said it was making a further $70 billion available to the financial sector. The Bank of England and the Swiss National Bank also offered $10 billion each.

In early trading, London's FTSE 100 was up 2.30 percent at 4467, Paris CAC' had gained 2.46 percent at 3583 and the Frankfurt Dax was up 1.86 percent at 5107.

Asian and Pacific markets were relatively stable Thursday -- a day after major indices declined sharply on fears of the world financial crisis.

The Bank of Korea gave markets a potential boost. South Korea's central bank followed the lead taken by other central banks a day earlier, slashing its key interest rate by a quarter percent, the Yonhap news agency reported.

The KOSPI index in Seoul closed up 0.6 percent on the day.

In another move to support markets, the Bank of Japan injected 2 trillion yen ($20 billion) into money markets.

In Tokyo, the Nikkei average closed down half a percent Thursday, after declining 9.4 percent a day earlier. Wednesday's losses represented a new five-year low and the third largest single-day decline ever.

The Hong Kong Monetary Authority also did its part to back markets, cutting its key interest rate by half a percent -- the second such move. Over the last two days, the monetary authority has slashed rates 1.5 percent.

Hong Kong's Hang Seng index recovered from Wednesday's 8 percent plunge, gaining 2.7 percent by midday. The Taipei Weighted was down 1.5 percent.

The All Ordinaries index in Sydney, Australia, was down 1.8 percent.

Global markets snapped back strongly for a time on Wednesday after central banks around the world joined together to cut interest rates in an effort to address market concerns.

The positive effect was short-lived, however, as all major European markets and Wall Street closed the day lower. European markets finished down anywhere from 5 to 9 percent. The Dow Jones industrial average fell 190 points, or 2 percent.

Iceland's banking system took another hit as the Icelandic Financial Supervisory Authority nationalized a third bank in as many days, taking control of Kaupthing.

The move means the bank will continue operating and all domestic deposits will be fully guaranteed, the authority announced Thursday.

Two other banks, Landsbanki and Glitnir, were also taken into receivership this week.

The most dramatic move Wednesday came in the UK, where the Treasury announced a plan to inject billions of dollars into the banking system.

Under the British plan, the largest banks have agreed to increase their capital by $43.7 billion and the government "stands ready" to provide $43.7 billion if necessary.

Among the banks participating in the program are global financial leaders Barclays, HBOS and Royal Bank of Scotland.

The government also said it is increasing the amount of long-term funding it is providing to banks under a special liquidity plan announced in April. Since then, the British government has made more than $176 billion available to banks. British Finance Minister Alistair Darling said that amount will now be increased to at least $350 billion.