Asian markets have staged a tentative recovery in response to the US government rescue of insurance giant AIG, but investors remain nervous.

Stocks in Tokyo, Taipei, and Seoul all rose, although share prices in Hong Kong and Australia lost ground after starting higher.

The dollar also rose against major currencies.

Investors are concerned that financial markets will remain unstable after the dramatic events of the past few days.

AIG’s bail-out follows the collapse of US investment giant Lehman Brothers, which caused share prices to plummet across the world’s financial markets.

Another investment bank, Merrill Lynch, has been sold off to Bank of America.

Japan’s Nikkei 225 index ended up 1.2% at 11,749.79, after hitting a three-year low on Tuesday. The index had earlier rose as much as 2.3%.

Hong Kong’s Hang Seng index was down 1.85% at 17,691.2 points after earlier rising as high 18,699.18.

European markets are expected to open slightly higher amid relief that AIG wasn’t allowed to go bankrupt.

News reported by The BBC