European shares rallied in late trading on Thursday to close largely flat as gains for mobile phone maker Nokia and chemicals maker BASF offset losses for financials, notably UBS.
Leading Wall Street equity indexes, which often set the trend for European stock markets, turned into positive territory shortly before the close in Europe.
The FTSEurofirst 300 index of top European shares ended unofficially 0.1 percent higher at 1,330.93 points, having fallen as much as 2.6 percent in intra-day trading.
"The mood was bad the whole day," one Frankfurt-based trader said, adding he could see no clear reason for the late rally.
"There's little to suggest that the rampant volatility we've seen of late will be disappearing any time soon," CMC Markets said in a note.
Shares in mobile phone maker Nokia rose 3.3 percent and BASF added 1.9 percent. The DJ Stoxx chemicals index was Europe's leading sectoral gainer with a rise of 2.2 percent followed by technology, up 1.5 percent.
The DJ Stoxx banks index fell 1.4 percent and insurance shares lost 1.4 percent. Both indexes recovered from falls of more than 4.5 percent sparked by worries of more write-downs in the financials industry.
UBS closed 3.8 percent lower -- building on Wednesday's losses sparked by a shock $4 billion write-down -- after Switzerland's banking watchdog said UBS and rival Credit Suisse could face more write-downs.