Picture : Stock Exchange in ThailandMOST Asian stock markets rallied for a second straight day on Tuesday as fears of credit crisis jeopardising global economic growth continued to recede, dealers said.
But several bourses lost ground as investors remained on high alert for fresh signs of trouble in credit markets due to problems in US subprime mortgages to high-risk borrowers.
Singapore's Straits Times Index fell 2.82 per cent or 93.72 points to 3,228.66 at closing time.
European stock markets meanwhile struggled to maintain their recovery in early trade despite declining fears of a full-blown credit crunch after the Federal Reserve slashed the lending rate it charges commercial banks on Friday.
Malaysian shares closed lower in cautious trade. They fell 1 per cent on the eve of a policy meeting by the Bank of Japan (BoJ), dealers said.
The Kuala Lumpur Composite Index (KLCI) inched down 11.91 points to 1,231.48.
In Asia, many markets clawed back more of their hefty recent losses, with the region's largest market in Tokyo closing up 1.07 per cent.
Japanese Finance Minister Koji Omi said there were signs that financial market conditions were improving.
'We still cannot say the situation is completely resolved, but it has been stabilising for a while,' he told reporters after agreeing with US Treasury Secretary Henry Paulson by telephone to monitor the financial markets closely.
Chinese share prices rose 1.03 per cent to close at another record high on Tuesday as the market continued to focus on strong corporate earnings following a huge rise the previous day, dealers said.
Hong Kong ended up 0.6 per cent but off its earlier highs following Monday's announcement that mainland Chinese will soon be able to invest directly in the bourse as the economic powerhouse further integrates into the global economy.
Too soon for celebration
Analysts said it was too soon to say markets are out of the woods.
'Although fears about the health of the US financial system receded somewhat in the wake of the Fed's monetary action, worries about subprime mortgage problems will persist, making the US stock market volatile too,' said Shinko Securities strategist Tsuyoshi Segawa.
'But once the volatility eases, the market may start focusing on economic fundamentals,' he said.
Elsewhere in the region Philippine share prices rocketed 9.8 per cent higher in the biggest single-day gain in seven years as investors jumped back into the market after Monday's holiday, anxious not to miss a recovery.
Seoul added 0.3 per cent, 'suggesting that the panic seen last week was ebbing,' Samsung Investment Management fund manager Suh Duck-Shik said.
But trading remained volatile because investors were cautious for fear of more bad news from credit markets, he said, adding, 'Foreign investors keep on selling, which worries me.' Sydney closed up 1.0 per cent and Wellington rose 1.14 per cent.
But some markets missed the party. Singapore's Straits Times Index closed 2.82 per cent lower, Kuala Lumpur fell 0.8 per cent and Jakarta shed 1.8 per cent, while Taipei fell 0.43 per cent.
'I think investors see that the turbulence in the global equity markets driven by the credit market crisis is not over yet,' said Panin Capital analyst Luki Aryapama in the Indonesian capital. -- AFP
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