Asian shares rose to a six-month high on Tuesday after Goldman Sachs' stronger-than-expected profit signaled the worst could be behind for U.S. banks, but plenty of concerns about the global economy still remain.

European shares were set to gain at the start of the trading week for some markets after the long Easter weekend. However, other markets signaled far less optimism. The yen, which tends to benefit from safe-haven trades, gained broadly.

Whether a rally for Asian stocks outside Japan -- up now more than 30 percent since their 2009 low on March 4 -- can be sustained remains in doubt, with analysts saying the full brunt of the global recession has yet to be reflected.

Singapore devalued its currency after posting on Tuesday its worst quarterly economic contraction ever, while a forecast for weaker demand for oil by the International Energy Agency sent crudes tumbling to below $50 a barrel.

Asian automaker shares slid on worries over the fate of General Motors Corp , helping send Japan's Nikkei average <.N225> down 0.9 percent.

If GM were to go bankrupt, that would raise questions about what would happen to Japanese auto-parts makers and Japanese automakers' dealer networks. The implications are broad, said Takahiko Murai, general manager of equities at Nozomi Securities.

Although the financial sector seems to have seen the worst, a recovery for manufacturers has been slow and worries remain.

Still, the MSCI index of Asia-Pacific stocks outside Japan <.MIAPJ0000PUS> rose at one point on Tuesday to its highest since mid-October.

The MSCI gauge rose 2 percent as of 0600 GMT (2:00 a.m. EDT), as major markets such as in Hong Kong <.HSI> and Australia <.AXJO> added more than 2 percent each in their return to trade after a four-day weekend.

The gains came after Goldman Sachs Group Inc on Monday posted much higher-than-expected first-quarter profit as it took more trading risk, and said it plans a $5 billion common share sale to help pay back government funds.

The results followed Wells Fargo announcement last week that it expects to report a record first-quarter profit.

Though Goldman and Wells Fargo did not suffer as much as other U.S. financial firms, at least they were seen providing some signs the U.S. banking industry is finally stabilizing after months of credit-related losses.

Markets in South Korea <.KS11>, Taiwan <.TWII> and Shanghai <.SSEC> posted more modest gains.

NOT SO FAST?

A further wave of global earnings results this week could steer markets, including those from beleaguered Citigroup and U.S. blue chip General Electric , both on due Friday.

It could be rough for some sectors. Qantas Airways Ltd forecast on Tuesday its first second-half loss in six year as Australia's biggest airline battles a slump in passenger demand and rising competition.

The fate of U.S. auto makers also remains a concern.

The New York Times reported late on Sunday that the U.S. Treasury Department was directing GM to lay the groundwork for a bankruptcy filing should it fail to reach give-back deals with stakeholders by a deadline set by the Obama administration.

That hit shares in automakers such as Japan's Toyota Motor <7203.T> and South Korea's Hyundai Motor <005380.KS> on Tuesday.

There's still a lot of uncertainty out there, so many players are staying on the sidelines and we're seeing some one-time profit-taking, said Tomomi Yamashita, a fund manager at Shinkin Asset Management.

Oil prices remained below $50 a barrel after falling 56 cents to $49.48 a barrel after the International Energy Agency forecast world oil demand will dive by a hefty 2.4 million barrels per day in 2009 given the global recession.

The lingering caution bolstered the safe-haven yen on Tuesday. The dollar dropped 0.3 percent to 99.76 yen from late U.S. trade the previous day., while the euro lost 0.3 percent to 133.30 yen.

The Australian dollar rose as far as 73.49 yen, its highest since mid-October, but then slipped to 72.75 yen, down 0.5 percent.

In debt markets, Japanese bonds pared earlier losses following a surprisingly solid auction for 30-year bonds.

That sale was seen as an important test of investor demand after the government announced last week that it would issue more than 10 trillion yen ($100 billion) of debt in the year to March 2010 to finance its biggest ever stimulus package.

June futures edged down 0.14 point to 136.56, while the benchmark 10-year yield was up 1 basis point at 1.460 percent.

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