Asian markets rose for a second day today as investors were heartened by Wall Street's comeback yesterday.
Japan's Nikkei 225 index was up 2 per cent afternoon trade, and markets in India, South Korea, Australia and the Philippines were also up strongly.
The advance helped Asian markets recover more of their losses from their steep slide Monday and Tuesday that was driven by fears of a recession in the United State, a vital export market.
Still, trading was volatile today, with Hong Kong's Hang Seng Index dropping as much as 1.3 per cent before it rose to a 3 per cent gain by midday. Coming a day the index soared nearly 11 per cent, Hong Kong's market has almost recouped its 13.7 per cent plunge from earlier this week.
While worries lingered about the US economy, which has been battered by a housing slump and credit crisis, investors were clearly encouraged by the comeback on Wall Street on Wednesday.
The Dow Jones industrial average sank as much as 323 points before bouncing back to rise 298.98 points, or 2.5 per cent, to 12,270.17.
The 631.86 point turnaround in the Dow was the largest for a single day in more than five years.
Yesterday's rebound in the United States came a day after the Federal Reserve slashed a key interest rate by an unprecedented 0.75 point to 3.5 per cent in an attempt to support the sputtering economy.
But many economists still predict a US slowdown and said markets would remain turbulent for some time given the uncertain economic outlook.