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Bangkok, New York, London: European and Asian stocks surged yesterday but Wall Street traded lower as dismal survey on US consumer confidence and news of further home price declines prompted traders to lock in gains from a big rally.
Markets in Hong Kong and Australia, both of which were closed since Thursday for Easter, surged on easing concerns about the global credit crisis that has battered Asian stocks since the start of the year.
"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. "We have gone down low enough and the market is ready for a rebound. Banks will lead the rally."
Hong Kong's benchmark Hang Seng index jumped 6.4 per cent to 22,464.52, while Australia's S&P/ASX 200 index rose 3.7 per cent to finish at 5,318.4.
Japan's Nikkei 225 index climbed 2.2 per cent to 12,745.2 after closing flat Monday, and India's Sensex was up 5.5 per cent in afternoon trading.
European markets, which were closed on Friday and Monday for the Easter holiday break, chased Wall Street higher on Tuesday with big gains across the banking sector.
In European deals near the half-way stage, London was showing a gain of 3.41 per cent, Paris surged 3.24 per cent and Frankfurt rallied 3.04 per cent.
Investors were heartened by a new agreement that will give Bear Stearns Cos shareholders five times the payout that was set in a JPMorgan Chase & Co buyout deal a week ago.
There was also optimism about the US housing sector, which has been at the heart of the credit problems. The National Association of Realtors that Monday said sales of existing homes in the US rose 2.9 percent in February, the first gain since July.
Still, some analysts warned that the declines in regional markets may not be over.
"It's too early to conclude an end of the prevailing bear market," said Ernie Hon, a strategist at ICEA Securities in Hong Kong.
The mainland Chinese market recovered from an early drop to close nearly flat, as a rally in airlines offset a continued decline in PetroChina on views the stock is overvalued. The Shanghai Composite Index rose 0.1 per cent to 3,629.62.
"Today is all about Bear Stearns," said GFT Global Markets analyst Martin Slaney yesterday.
"The improved price tag from JPMorgan has provided major upside to American and Asian shares and sets a positive lead," Slaney added.
Across the Atlantic on Monday, news of a surprise rebound in existing home sales had also brightened the mood in New York.
In the US the Dow Jones Industrial Average fell 52.43 points (0.42 per cent) to 12,496.21 at 1505 GMT, consolidating after two sessions of robust gains that added 400 points to the blue-chip index.
The Nasdaq composite edged up 3.95 points (0.15 per cent) at 2,330.34 and the Standard & Poor's 500 index drifted down 1.70 points (0.13 per cent) to 1,348.18.
Markets were digesting strong back-to-back rallies on Wall Street rallies around a holiday weekend break as investors cheered the Federal Reserve's aggressive moves to pump in liquidity and ease interest rates to fight a housing and credit crunch.
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