HONG KONG - Asian markets attempted to stabilise on Tuesday after a wild few days of stumbling stocks, crumbling bonds, a plunging pound and a soaring US dollar, with the greenback easing a bit and stocks flat.

Sterling, which collapsed to a record low at US$1.0327 on Monday, recovered to US$1.0742. S&P 500 futures rose 0.7 per cent, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.1 per cent. Japan's Nikkei also rose 0.7 per cent.

Singapore's Straits Times Index was down 0.5 per cent at 11.18am local time.

Against the United States dollar, the Singapore currency rose 0.17 per cent to 1.4358 from Monday's close.

Analysts were doubtful about the outlook, however, as markets - already jittery at the prospect of US interest rates staying higher for longer - have been further unnerved by an upheaval in British assets in response to government spending plans.

Britain plans tax cuts on top of huge energy subsidies, and a lack of confidence in the strategy and its funding hammered gilts, or British government bonds, and the pound last Friday and again on Monday.

The yield on five-year gilts is up a stunning 100 basis points in two trading days.

"(It) is definitely something that is unfolding... we are probably only at a certain initial stage of seeing how the market digests that kind of information," said Ms Yuting Shao, macro strategist at State Street Global Markets.

"Of course, the tax cut plan itself was really... to stimulate growth and reduce household burdens, but it does raise the question of what the implications are in terms of the monetary policies."

After the pound's plunge, the Bank of England said it would not hesitate to change interest rates and was monitoring markets "very closely".

Spillover to US markets drove Wall Street deeper into a bear market, which is when a major market index falls by 20 per cent or more from its most recent high. It also lifted benchmark 10-year Treasury yields more than 20 basis points to a 12-year high of 3.933 per cent.

After two weeks of mostly steady losses on the US stock market, the Dow Jones Industrial Average confirmed on Monday that it was in a bear market, tracing its start to declines in early January.

The S&P 500 index confirmed in June it was in a bear market and on Monday, it ended the session below its mid-June closing low, extending this year's overall sell-off.

State Street's Ms Shao said uncertainty is rippling through the market and weighing on investor sentiment.

"We are already entering a bit of a slowing down when it comes to global recovery, and the continual tightening of central banks will, of course, bring more pain in terms of their domestic economic recovery," she said.

The US dollar index on Tuesday eased 0.1 per cent to 113.8, after earlier touching 114.58, its strongest against a basket of peer currencies since May 2002.

The euro was up 0.3 per cent on the day at US$0.9634 after hitting a 20-year low a day ago.

Oil and gold nursed losses. Gold, which hit a 2½-year low on Monday, rose 0.5 per cent to US$1,629 an ounce. Oil lifted slightly from its lowest levels since January.

US crude ticked up 0.66 per cent to US$77.22 a barrel. Brent crude rose to US$84.71 per barrel. REUTERS