With lower Manhattan still largely without power Tuesday, United States stock exchanges tested contingency plans to ensure trading resumes as soon as possible this week after Hurricane Sandy smashed into the East Coast and shut down operations.

US markets stayed closed for a second day, but the New York Stock Exchange said that despite reports that its historic trading floor suffered irreparable damage, no such damage has occurred.

Meantime, global markets recovered their poise, though trading remained subdued.

The New York Stock Exchange's decision to remain shut marks the first time weather has stopped trading for two straight days since 1888.

Though the impact on the US economy could be hefty, the global financial markets that are open have largely remained calm. Monday's losses in Europe have been more than recovered on Tuesday.

"Markets have put in a robust performance with equity prices appearing to have held up despite the damage that has been inflicted on the North East coast by Hurricane Sandy," said Fawad Razaqzada, market strategist at GFT Markets.

European situation

In Europe, the FTSE 100 index of leading British shares was up 0.7 per cent at 5,835 while Germany's DAX rose 0.9 per cent to 7,266. The CAC-40 in France was 0.8 per cent higher at 3,436.

There have been strong performances by individual stocks in Europe, not least BP, which announced a big dividend increase, and UBS, which revealed plans to lay off 10,000 staff.

Investors will continue to monitor the progress of the storm, which has already claimed the lives of at least 39 people, to assess the financial impact. So far, experts estimate the cost of the damage is around US$20 billion, with around half of that insured.

Many investors are looking back into history for guidance.

In 2005, for example, Hurricane Katrina, the most devastating hurricane in US history, lowered the country's economic growth by around one per cent before it bounced back on the back of reconstruction.

Beyond stocks, financial markets were relatively calm.

The euro recouped the previous day's losses to trade 0.4 per cent higher at US$1.2950 despite a survey from the European Commission showing that economic sentiment in the 17-country Eurozone fell to a 38-month low in October. Figures showing Spain's economy shrank a further 0.3 per cent in the third quarter meant the country has been in recession for five straight quarters.

Meanwhile, the price of benchmark New York oil was also 13 cents higher at US$85.67 a barrel.

Earlier in Asia, trading was more mixed.

Japan's Nikkei 225 index fell one per cent to close at 8,841.98 after the Bank of Japan announced it was expanding a bond-buying programme to help spur growth. Some analysts said they were disappointed by the small size of the programme.

The announcement followed a report showing Japan's industrial output contracted by 4.1 per cent in September from August and 8.1 per cent from a year earlier.

Japan's economy has been hobbled by weakness in its turbocharged export sector, which has been hit hard by a slowdown in demand from recession-mired Europe and a persistently strong yen, which makes Japanese products more expensive for overseas buyers.

Elsewhere, South Korea's Kospi index rose 0.4 per cent to 1,899.58 but Hong Kong's Hang Seng index fell 0.4 per cent to 21,428.58. Benchmarks in mainland China also rose.

- AP