LONDON: European stock markets built on a strong rally seen a day earlier owing to a pledge by leading G20 nations to keep pumping their economies with easy money, while Asian stocks diverged on Tuesday.

Gains in Europe were however less sharp than on Monday as investors digested a batch of mixed earnings reports.

"Looking at the major indices, there is maybe an element of twitchiness creeping back into the market," said IG Index chief market strategist David Jones.

In late morning trade, London's benchmark FTSE 100 index was up 0.29 percent to 5,250.49 points, Frankfurt's DAX 30 rose 0.35 percent to 5,639.42 points and in Paris the CAC 40 climbed 0.14 percent to 3,791.03.

Europe's main stock markets had closed up between 1.8 and 2.4 percent on Monday on prospects for continued stimulus measures to underpin economic recovery in leading world economies, traders said.

Tokyo's benchmark Nikkei-225 index climbed 0.63 percent to close at 9,870.73 points on Tuesday as investors took their cue from New York where the Dow Jones Industrial Average rose 2.0 percent, hitting the best close for 13 months.

Tokyo's gains were capped, however, by worries about the renewed strength of the yen as well as uncertainty surrounding the nearly two-month-old Japanese government's economic policies, analysts said.

"The market's momentum is rather sluggish, because foreigners are reluctant to buy Japanese stocks," Nikko Cordial senior strategist Tsuyoshi Kawata told Dow Jones Newswires.

As long as US interest rates stay low, the dollar is likely to remain weak against the yen, he said. The greenback's slide is bad news for Japanese exporters such as car and electronics makers.

Elsewhere in Asian stock market trade on Tuesday, Hong Kong advanced 0.27 percent, Shanghai gained 0.10 percent and Sydney jumped 1.26 percent.

Jakarta dropped 1.02 percent and Mumbai lost 0.35 percent.

On Monday, the Dow Jones Industrial Average jumped 2.03 percent to end at 10,226.94 points, logging its best closing level since October 3, 2008.

Market sentiment was lifted by a weekend decision by G20 finance ministers to stick to emergency stimulus support measures despite signs that the world was emerging from a long financial maelstrom, analysts said.

It acted as a "impetus," said Patrick O'Hare of as the ministers "tempered the market's concerns about stimulus measures being withdrawn too soon."

Together with last week's US Federal Reserve announcement that interest rates will likely remain at exceptionally low levels for an extended period, it "effectively sent a message that easy money policies will remain the rule and not the exception," O'Hare said.

The world's largest and top emerging economies agreed at a Group of 20 (G20) meeting on Saturday in Scotland to maintain stimulus measures to support "uneven" economic recovery.

"The recovery is uneven and remains dependent on policy support, and high unemployment is a major concern," the G20 said in a final communique.

"To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured."