TOKYO: Asian markets tried to rebound Friday as investors set aside a wave of global layoffs and overnight losses on Wall Street, where stocks failed to get a boost from interest rate cuts in Europe.

Markets were caught in a tug-of-war between bargain hunting by some investors and selling by others who are worried about the outlook for the faltering global economy after thousands of layoffs by major companies.

Investors were concerned that a record 75 basis point rate cut by the European Central Bank and a 100 basis point reduction by the Bank of England would not bring much relief to markets in the near term.

"The previous coordinated rate cuts didn't work. No one expects the European economy to hit a bottom thanks to the cuts this time around," said Kazuhiro Takahashi, equity trading information chief at Daiwa Securities SMBC.

But some investors were hoping Wall Street might rally after key US jobs data due out later Friday, because markets have already priced in a gloomy report.

"It's obvious the upcoming data will be bad but some investors expect buying will emerge again after the figures are out, no matter how bad they are," said Takahashi.

Some investors in Tokyo scooped up shares after the Nikkei fell below the key 8,000 points level, with the index up 0.7 per cent by lunch.

Hong Kong shares rose 2.6 per cent and Seoul posted a gain of 2.0 per cent, although some other markets drifted lower in quiet trade.

In the United States on Thursday, the Dow Jones Industrial Average tumbled 2.51 per cent to 8,376.24 as investors stampeded toward the safety of US Treasury bonds as rising job losses hit sentiment.

US telecommunications giant AT&T said Thursday that it was cutting 12,000 jobs, chemical group DuPont announced about 2,500 layoffs and media group Viacom said it would shed about 850 jobs.

The heads of the struggling Big Three American automakers warned that their collapse could cost up to three million jobs in the auto sector and wider economy, and pleaded for US$34 billion in financial lifelines.

A government report released Thursday showed a drop in the number of new US unemployment claims in the past week, but the level remained high at 509,000.

Expectations are now growing for a 75 basis point interest rate cut by the US Federal Reserve next week to try to revive the world's largest economy, said Dariusz Kowalczyk, chief investment strategist at CFC Seymour.

In Europe, the losses were modest as traders digested the impact of big rate cuts by the European Central Bank and Bank of England.

ECB head Jean-Claude Trichet warned that the eurozone economy could contract by as much as 1.0 per cent next year.

British house prices slumped by a record 14.9 per cent in the last three months and British car sales tumbled by a 28-year record of 36.8 per cent in November on a 12-month comparison as demand evaporates.

In France, where official data showed the unemployment rate rising by 0.1 per cent to 7.3 per cent in the third quarter, President Nicolas Sarkozy unveiled a massive stimulus plan worth 26 billion euros (US$33 billion).

Authorities elsewhere in the world also stepped up the fight against recession Thursday. New Zealand's central bank cut the official interest rate by a record 1.5 percentage points to 5.0 per cent.

In Sweden, the central bank reduced its benchmark rate by 1.75 percentage points to 2.0 per cent Thursday in the sharpest cut since 1992 and Denmark cut its rates by 0.75 points to 4.25 per cent in line with the ECB move.

China and the United States were on Friday wrapping up their last high-level economic meeting under the Bush administration with vows to fight protectionism in a time of global financial crisis.

US Treasury chief Henry Paulson said the United States and China would make US$20 billion available in trade financing to boost commerce amid the global slowdown.

- AFP/yb