Most Asian stock markets rebounded Tuesday after several days of steep declines as investors snapped up beaten-down shares like Honda, Samsung and HSBC.

Meanwhile, shares in Europe also opened higher.

Hong Kong's Hang Seng index rose 14.4 per cent — its biggest gain in 11 years — to 12,596.29, a day after plunging more than 12 per cent. South Korea's Kospi jumped 5.6 per cent to 999.16.

Japan's benchmark Nikkei 225 index surged 459.02 points, or 6.4 per cent, to 7,621.92 after earlier falling to fresh 26-year lows. A weaker yen against the U.S. dollar encouraged traders to buy exporters like Toyota and Sony, whose overseas earnings have been eroded by the strong yen.

The American dollar, which had fallen to a 13-year low against the yen on Friday, rose to 94.72 yen from 93.01 yen in late New York trading.

Even Shanghai's main index, which had fallen 6 per cent earlier, turned positive in the afternoon.

"The market can't fall forever," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Lun said the Hang Seng's huge drop Monday was bringing buyers back to seek bargains and scoop up blue chips that had tumbled. He pointed to banking giant HSBC, which had declined Monday to levels not seen since the SARS outbreak in 2003.

In Europe, stocks rose in early trading. London's FTSE 100 index gained almost three per cent, Germany's DAX jumped 4.4 per cent and France's CAC-40 rose nearly three per cent.

U.S. stock index futures were sharply higher early Tuesday, suggesting Wall Street would advance after an erratic session Monday. The Dow Jones industrial average and S&P futures were both up more than four per cent.

"Extreme pessimism eased in the market as sentiment cheered the yen's retreat and sharp gains across Asia," said Yutaka Miura, senior strategist at Shinko Securities in Tokyo. He also said that the Nikkei's early fall below 7,000 points spurred buying.

Australia's key stock measure closed down 0.4 per cent, though sharply pared earlier losses. Singapore's market index, also down more than five per cent in morning trading, turned green in afternoon trading.

In South Korea, the buying was driven by domestic investors following the biggest rate cut ever by the central bank on Monday, analysts said, even as foreign investors kept selling to get cash to meet redemptions and liquidity needs at home.

South Korea's Samsung Electronics Co. rose 5.8 per cent, while Hyundai Motor Co. jumped 12.6 per cent.

In Tokyo, Honda Motor Co. surged 14 per cent, Toyota Motor Corp. jumped 7.8 per cent and Sony Corp. rose 9.6 per cent.

In a volatile session Monday on Wall Street, the Dow fell 203.18, or 2.42 percent, to 8,175.77 after earlier rising by as many as 220 points. Most of the decline came in the final 10 minutes of trading. Broader indicators fell more.

In Toronto, the main index fell 756.75 points, or 8.14 per cent, to close at 8,537.34, the lowest close in more than four years.

South Korea's currency, the won, sank a further 1.7 per cent against the U.S. dollar despite suspected intervention by the central bank to purchase dollars. The won closed at 1,467.80 and is now down 36.2 per cent so far this year.