NEW YORK (CNNMoney.com) -- Global markets turned sharply lower Wednesday, despite emergency action by global central banks that had initially calmed skittish investors.

Stock markets worldwide had briefly recovered after the United States, Canada, England, the European Union, Sweden and Switzerland announced coordinated interest-rate cuts at 7 a.m. ET.

But sentiment turned, and investors sent stocks falling way down to the low levels seen in the hours before the joint cut was issued.

In Germany, a leading stock index had been trading flat just after the announcement, but finished the session down 5.9%.

Stocks in Paris were down 6.31%, after having been down just 0.2%.

Stocks in London were down 5.2% after having risen slightly.

In New York, the Dow Jones industrial average was volatile, moving in and out of positive territory, but managed to rise by 1% later in the day. (Full coverage)

Markets in Latin America fared no better.

In Colombia, stocks were down 5.9%, while Argentina's major index fell 4.3%.

Stocks in Brazil rollercoastered through the day plunging 5.1% at open, then recovering, and then trading back down down 3.1%.

Stocks in Chile also lost 3.5%, and Mexico's primary index was up just 0.3%.

Markets in Asia were already closed by the time the central banks acted. Investors in Japan suffered one of their worst days ever, with the Nikkei down more than 9%. Hong Kong's Hang Seng index plunged 8.2%, even as the Hong Kong Monetary Authority announced it would lower interest rates a full percentage point starting Thursday.

A Russian stock exchange was shut down after a huge decline at the open.

European governments step in

Three European central banks announced that they were pumping more money into the system to keep banks going.

The most dramatic move was in Great Britain, where the Treasury announced a plan to inject billions of dollars into the banking system.

British Finance Minister Alistair Darling announced the program shortly before markets opened in Britain.

"This is a major step," Darling told CNN affiliate ITN. "Never before have we been in a position where the government is actually saying to banks, 'You've agreed with us that you're going to raise more capital. If you can't do it in the normal way on the markets, we'll actually provide the funds to enable you to do that.'"

The goal of the effort, carried out in consultation with the nation's central bank and regulators, was to provide immediate relief and free up lending.

"In these extraordinary market conditions, the Bank of England will take all actions necessary to ensure that the banking system has access to sufficient liquidity," according to a British government statement. "In its provision of short term liquidity the [central] bank will extend and widen its facilities in whatever way is necessary to ensure the stability of the system."

Under the British plan, the largest banks have agreed to increase their capital by $43.7 billion and the government "stands ready" to provide $43.7 billion if necessary.

Among the banks participating in the program are global financial leaders Barclays, HBOS and Royal Bank of Scotland.

The government also said it is increasing the amount of long-term funding it is providing to banks under a special liquidity plan announced in April. Since then, the British government has made more than $176 billion available to banks. Darling said that amount will now be increased to at least $350 billion.

"This is not a time for conventional thinking or outdated dogma, but for the fresh and innovative intervention that gets to the heart of the problem," British Prime Minister Gordon Brown said.

Brown and Darling said the plan would ensure the flow of money between banks and their customers. They said it would "unjam" any potential freeze by lenders jittery about global markets and liquidity.

Separately, the European Central Bank, the Bank of England and the Swiss National Bank offered $90 billion in overnight money to the financial sector, the Associated Press reported. The ECB offered up $70 billion, while the BoE and the Swiss bank each offered $10 billion.

-- The CNN Wire reports were used in compiling this article.