LONDON, Oct 5: European stock markets closed sharply higher on Wednesday, bouncing back from sustained heavy losses on hopes European nations will support their banks to prevent the eurozone debt crisis from spreading.

London’s FTSE-100 index of leading shares jumped 3.19 per cent to 5,102.17 points while in Frankfurt, the DAX soared 4.91 per cent to 5,473.03 points and in Paris the CAC-40 advanced 4.33 per cent to 2,973.90 points.

Other European markets posted similar gains, with Milan gaining nearly 4.0 per cent despite a sharp Moody’s ratings downgrade for Italy given its debt and growth problems.

In New York, US stocks were little changed after a dramatic turnaround late Tuesday as news of the possible EU bank action plan came through.

The Dow Jones Industrial Average was up 0.34 per cent at around 1615 GMT, the broader S&P 500 added 0.50 per cent while the tech-heavy Nasdaq Composite gained 1.38 per cent.

The euro was lower at $1.3296, down from $1.3338 in New York late Tuesday when it hit a 9-month low of $1.3146. The dollar rose to 76.86 yen from 76.82 yen.—AFP