European stock markets are tumbling again, despite some early gains, which were caused by the decision of the European Central Bank, ECB, to buy up government debt.

Spanish and Italian markets went up in early trading before falling back and major European indexes slipped sharply in mid-morning trading. In London and Paris, the FTSE 100 and CAC 40 indexes lost almost 2%, while Frankfurt's DAX was down almost 3%.

Jitters about the state of the US economy remain among investors on the backdrop of markets crashing last week, with the DAX losing about 13% of its value, the FTSE 100 dropping 10% and the Dow Jones ending the week 5.8% lower.

The collapse triggered the ECB move, which was followed by a tumble of yields on Spanish and Italian bonds.

The yield on Spanish 10-year bonds - an indication of the risk associated with lending Spain money - fell from more than 6% to about 5.2%. Yields on Italian bonds fell by a similar amount.

Earlier, Asian shares had fallen as investors worried about rating agency Standard and Poor's downgrade of US debt. Japan's Nikkei and Hong Kong's Hang SENG indexes lost 2.2%, while South Korea's KOSPI dropped 3.8%.

Analysts cited by the BBC Monday have warned that markets would remain volatile in coming weeks, despite the G7 group of developed countries and the ECB vowing to support financial stability.

On Sunday, the ECB indicated that it would start buying the bonds of Eurozone governments, hoping to raise confidence that some of its biggest economies would not default on their debt.

In a separate statement, the G7 group of developed countries pointed out members were "determined to react in a coordinated manner" to preserve financial stability.

The rating agency Standard & Poor's (S&P) on Friday downgraded America's top-notch AAA rating to AA+.

S&P, one of the world's three major rating agencies, failed to be impressed by a last-minute deal in the US last week to raise the US debt limit by up to USD 2.4 TN from USD 14.3 TN, saying a potential US government default on its debt was avoided, but only achieved after months of bickering between Democrats and Republicans in Congress.

The credit rating downgrade is not only seen as a major embarrassment for President Obama's administration, but it could also raise the cost of US government borrowing and has underminded investors' confidence.