Bourses from Singapore to Hong Kong, Jakarta, Seoul and Sydney all roared to record levels as buyers rushed back into blue chips.

The ignition switch came in the form of Wall Street's sizzling overnight gain, with the Dow Jones Industrial Average climbing 191.92 points to an all-time high of 14,087.55.

'The sub-prime problem now seems a distant memory. Regional buying momentum is strong, and the sky seems the limit,' said a local dealer.

Just a few weeks ago though, it seemed the sky was falling as problems in the US mortgage sector spread panic through global financial markets, including Singapore, where the Straits Times Index (STI) dived to as low as 2,962.01 on Aug 17.

The crisis centred on sub-prime mortgages - risky loans bundled into complex products and sold on to global banks - and threatened to jam up credit markets and send economies into recession.

Yesterday, investors shrugged off those concerns.

Local buying of blue chips sent the STI to 3,829.52 by 10am, but a hint of caution - and profit taking - then set in, and the index closed at a record high of 3,793.83, up 38.61 points.

But that gain looked anaemic when Hong Kong, which had been closed a day earlier, chipped in with an astonishing gain of 1,057.28 points, or 3.9 per cent, to 28,199.75.

Money pouring in from mainland China did the trick there, while domestic issues helped markets in Australia, South Korea and Indonesia to finish at records.

Japan's Nikkei Index also managed a 1.2 per cent jump to a two-month high of 17,046.78 points.

Though optimism seems the order of the day, there are some sceptics. Most analysts remain bullish on the local bourse, with some tipping the STI to pass 4,000 by year end, while Citigroup data yesterday suggested the regional buying momentum will continue as foreign cash continues pouring into Asia.

But financial fault lines remain, particularly in the US.

On Monday, Swiss bank UBS disclosed that it will take a $5.09 billion hit over its sub-prime exposure.

Meanwhile, its US rival, Citigroup, has revealed that September quarter profits will crash by up to 60 per cent - with sub-prime woes to blame.

Meanwhile, the greenback is in freefall, and oil prices are at near-record levels.

AmFraser Securities research head Najeeb Jarhom pointed to the lingering doubts: 'Sanity has returned after an August scare, but could this be new insanity?'

alfoo@sph.com.sg

WALL ST GAINS POWER STI TO ANOTHER RECORD HIGH, MONEY