LONDON, ENGLAND - Shares in the top British home-loan lender HBOS swung wildly on Wednesday, spinning European stocks into volatile uncertainty after an overnight rescue for US insurer AIG.

European markets opened on a generally optimistic note after the mega rescue of US insurance titan AIG by the US Federal Reserve, but early gains on leading markets then switched to losses and back to gains.

London's FTSE 100 index of leading shares also switched back and forth from gain to loss in a one-percent range, and was standing with a gain of 1.15 percent at 5,083.30 points.

Indices were moving sharply by the minute as the markets digested the AIG rescue, worried about the state of the financial system and sought direction amid uncertainty.

Some European financial shares rallied. But in London HBOS stock fell by up to 50 percent, rose by 20 percent, and was then showing an unsteady gain of 0.99 percent.

In Paris, the CAC 40 was up 0.29 percent to 4,099.36 points and Frankfurt's DAX 30 rose 0.25 percent to 5,980.17, having both switched into losses earlier in the morning.

Russia's leading RTS stock market suspended trading following a plunge of six percent, a spokeswoman for the dollar-denominated stock market told AFP.

In the Netherlands, shares in Belgian-Dutch bank Fortis switched into a loss of 5.84 percent from an initial rally of 5.34 percent. The overall AEX index was down 0.75 percent. On Tuesday they had closed at 7.43 euros for a fall on the day of 10.93 percent.

Dutch insurance group Aegon also showed early losses of more than five percent.

In Zurich, UBS stock began with a gain of 12.98 percent after closing down 17.21 percent on Tuesday. Swiss Re reinsurance bounced up 8.6 percent at 58.70 francs, after ending the day down 13.03 percent on Tuesday.

The overall Swiss market opened 123.05 points higher at 6,855.98.

World equities have experienced traumatic losses this week following the dramatic collapse of US investment bank Lehman Brothers.

European markets opened to news that the US Federal Reserve would extend an 85-billion-dollar loan to the American International Group.

The Federal Reserve plan, under which the US government will take a nearly 80 percent stake in AIG, marks an unprecedented intervention by the US central bank into a private business.

Frankfurt, London and Paris stock markets had fallen heavily on Monday and Tuesday despite massive injections of funds by central banks to support the banking system and prevent fear from starving the system of cash.

Tuesday's losses were driven largely by fear that AIG might be the next financial titan to collapse in fallout from the subprime mortgage crisis, analysts said.