Italy's top bank, UniCredit, was up 4.24 percent, Intesa Sanpaolo rose 2.58 percent to 1.115 euros and Banco Popolare advanced 1.17 percent.

Auto giant Fiat rose 2.04 percent, while oil major ENI gained 0.59 percent.

Stocks had gone up at the start of trading, then went into negative territory before picking up again.

The volatility comes after a 6.8-percent slump on Tuesday -- Milan's worst session since October 2008 at the start of the global financial crisis.

Meanwhile there was continued pressure on the bond markets with borrowing rates on 10-year government bonds above 6.0 percent -- seen by analysts as a threshold that could imperil Italy's chances of financing itself.

The rate reached a near-record high of 6.33 percent on Tuesday and was lower at 6.145 percent on Wednesday.

Copyright AFP (Agence France-Presse), 2011