Asia stocks extend rally, oil rises to $75

Due to signs that government efforts to push down short-term lending rates were working, Asian stocks rose on Tuesday. This came after comments by Federal Reserve Chairman Ben Bernanke backing up more government spending to fuel up the ailing US economy.

At a meeting on Friday, oil prices climbed back above $75 a barrel on expectations OPEC will cut output to boost prices.

The outcome will be watched since lower energy prices have been a relief for policymakers and consumers facing a sharp global slowdown.

Due to money markets loosening up, investors have shifted their attention to policymakers’ efforts to prepare their economies for a global recession. India’s central bank cut rates by a percentage point and the Chinese government announced a series of initiatives to support growth over the weekend.

"Market action confirmed that the worst has been avoided amid government bailout plans announced last week," said Dariusz Kowalczyk, chief investment strategist with CFC Seymour in Hong Kong.

"A global recession is unavoidable, volatility will continue and there will be more losses in equity and credit markets, but investors can focus on traditional fundamentals rather than viability of the system," he said in a note.

Shares climbed up

Japan's Nikkei share climbed 2.65 percent, having now repeated a quarter of the sharp decline in the last month in the last few days.

The MSCI index of Asia-Pacific stocks outside Japan rose 1.8 percent. The index remains down 18 percent so far in October and 50 percent in the year to date.

South Korea's benchmark KOSPI ticked up 0.7 percent after slightly touching a three-year low on Monday. The domestic market received a boost in confidence after the government announced a $130 billion plan to stabilize its financial sector.

On Tuesday, the Korean government said it was plans to guarantee $100 billion worth of foreign currency debts owed by 18 banks, some of whom will be posting their quarterly results in the next few weeks.