HONG KONG - Asia extended a global equities rally as more pledges of government support soothed worries over the banking sector and provided some much-needed stability after more than a week of upheaval.
The dialling down of volatility allowed traders to turn their focus on the US Federal Reserve's policy decision later in the day, with the recent turmoil fuelling hope it will hold off on an expected sharp hike in interest rates.
With the recent crisis blamed on the central bank's steep hike in borrowing costs over the past year, pressure is building on officials to pause their monetary tightening campaign, with many observers even tipping several cuts by the end of the year.
While that would deal a blow to the Fed's fight against elevated inflation, such a move is seen by observers as crucial to reinforcing stability and preventing another blow-up in the financial sector.
US and European markets surged at least one percent Tuesday, building on Monday's advances, as investors cheered comments from US Treasury Secretary Janet Yellen reiterating support for lenders after the collapse of two regional banks earlier this month.
The downing of Silicon Valley Bank and Signature Bank forced authorities to promise customers would not lose their cash in a bid to prevent a run on other firms.
- 'Fear index' drops -
The US and European rally filtered through to Asia, where banks were among the big gainers with tech firms.
Hong Kong led the way, riding more than two percent thanks to a bump in lenders HSBC and Standard Chartered as well as e-commerce titans Alibaba and JD.com.
Tokyo was also sharply higher as investors returned from a public holiday, while Seoul, Singapore, Sydney and Taipei were up by more than one percent.
Shanghai, Wellington and Manila also rose.