Asian markets were mixed on Thursday as investor enthusiasm over rate cuts around the world gave way to persistent fears over the severe strains in credit markets and the prospect of a global recession.
South Korea, Hong Kong and Taiwan lowered their interest rates, joining a series of cuts Wednesday in the U.S., Europe and China aimed at stabilizing global markets that have plunged sharply this week.
But lower interest rates alone are unlikely to cure the crisis in confidence, analysts said.
"Short-term selling pressure is still strong," said Lorraine Tan, director at Standard & Poor's equity research in Singapore. "I don't think interest rate cuts alone are going to help improve confidence all that much."
Investor reaction in Asia to the string of moves mirrored that in the U.S. and Europe: an initial recovery in several markets faded amid deep concerns about the depth of the crisis.
Tokyo's benchmark Nikkei 225 index rose more than 1 percent but fell back to close down 0.5 percent to 9,157.49, a five-year low. That followed a 9.4 percent plunge Wednesday, its biggest one-day drop since the 1987 market crash.
Hong Kong's Hang Seng index was up 2.1 percent in late afternoon trading at 15,779, and South Korea's key index rose 0.6 percent after earlier rising as much as 2.9 percent.
Mainland China's main index fell 0.8 percent after its central bank lowered rates Wednesday evening.
China's move came as six other central banks, including the U.S. Federal Reserve and European Central Bank, joined to lower rates to contain the spreading financial crisis. Japan's central bank, constrained by already-low rates, said it backed the moves.
On Wall Street, the Dow Jones industrial average ended a volatile session down 2 percent — disappointing, but a milder decline than in previous days.
Wavering investors in the U.S. were shaken by U.S. Treasury Secretary Henry Paulson's comment Wednesday that it would be several weeks before the government's $700 billion financial rescue package makes its first purchases of banks' troubled mortgage-backed assets.
Joining the worldwide efforts to ease the crisis, Taiwan's Central Bank reduced its key interest rate for the second time in two weeks. The Taiwan share benchmark nonetheless fell 1.5 percent, to 5,130.71.
"Our economy has come under pressure for a slowdown," Governor Perng Fai-nan said. "We hope the rate cut can stimulate consumption to spur economic growth."
In Indonesia, trading on the Jakarta Stock Exchange was canceled Thursday after the benchmark JSX index sank 10.4 percent Wednesday before trading was suspended by late morning. Authorities ordered the market to stay closed, possibly through Friday, following a late night Cabinet meeting.