Stock markets continued mostly firmer as investors cheered the latest US bank bailout plan, designed to neutralise the toxic assets at the heart of a financial collapse that has brought the global economy to its knees.

As he prepared to deliver a primetime television address on the crisis, Obama told his fellow world leaders that only coordinated action can break the cycle of "bubble and bust."

"We are living through a time of global economic challenges that cannot be met by half measures or the isolated efforts of any nation," Obama wrote in an opinion article in the International Herald Tribune.

"Now, the leaders of the Group of 20 have a responsibility to take bold, comprehensive and coordinated action that not only jump-starts recovery but also launches a new era of economic engagement to prevent a crisis like this from ever happening again."

European leaders, especially France and Germany, believe the G20 focus should be on regulation, not spending more taxpayer money in additional stimulus packages and Obama appeared ready to meet them half-way.

"If we continue to let financial institutions around the world act recklessly and irresponsibly, we will remain trapped in a cycle of bubble and bust," he wrote.

US Treasury Secretary Timothy Geithner unveiled a plan on Monday that offers government incentives for private investors to buy up to a trillion dollars of the assets, a move winning instant approval from the markets.

After the Dow Jones Industrial Average logged its fifth largest percentage gain ever overnight on Wall Street, Asian markets powered higher while Europe saw some profit-taking.

Hong Kong jumped 3.44 percent, Tokyo rose 3.32 percent to close at a more than 10-week high and Sydney gained 0.84 percent.

In Europe, Paris and Frankfurt were up 0.15 percent and 0.51 percent, respectively, but London was down 1.01 percent on profit-taking.

Monday's gains "were always going to open up the opportunity for a degree of profit taking," said CMC Markets dealer Nick Mitchell. "Put simply, investors need to decide whether Geithner's plan ... is going to be sufficient to re-start the US economy."

The high stakes involved in the crisis were highlighted Tuesday when China's central bank called for the dollar to be replaced as the international reserve currency in the interests of global stability.

People's Bank of China Governor Zhou Xiaochuan said he wanted to replace the dollar, installed as the reserve currency after World War II, with a different standard run by the International Monetary Fund (IMF).

China has the world's largest forex reserves at nearly two trillion dollars, with well over a third of that placed in US Treasury bonds, and has voiced increasing concern over the safety of its US investment.

"The outbreak of the crisis and its spillover to the entire world reflected the inherent vulnerabilities and systemic risks in the existing international monetary system," Zhou wrote in an essay posted on the bank's website Monday.

He suggested the IMF's Special Drawing Rights, or SDR, could serve as a super-sovereign reserve currency as it would not be easily influenced by the policies of individual countries.

Analysts were unconvinced the proposal was practical but said it clearly reflected Beijing's nervousness at developments.

"It's a sad situation: China is America's banker. America owes so much to China but it's not afraid of China," said Andy Xie, an independent economist based in Shanghai. "China is America's hostage. It's not the other way around."

Meanwhile, the eurozone's purchasing managers' index (PMI), compiled by data and research group Markit, rose to 37.6 points from 36.2 points in February and bolstered hopes the crisis might be bottoming out.

"March's rise ... is an encouraging sign but with the index close to its record low, output looks set to continue to contract sharply in first quarter," said Ben May at consultants Capital Economics.

Economist Marco Valli at Unicredit said the PMI survey might just mark a trough in the cycle although the risks were high that worse may still come.

"The March figures signal that momentum has 'improved' somewhat at the end of the first quarter but in the coming months we need to see ... a more convincing upward (trend)," Valli said.

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