(CNN) -- Markets rallied Monday after China announced a $586 billion stimulus package aimed at countering a slowdown in the Asian powerhouse's export-led economy.
But in the U.S. ongoing recession fears overshadowed any relief caused by the Chinese plan.
China's spending spree caused an immediate jump in oil prices to $64 a barrel in Asian trading. Oil prices had been dropping due to the economic downturn.
Earlier, Shanghai's index soared 7.3 percent, while Hong Kong's Hang Seng finished the day up 3.5 percent. The stimulus plan pushed Tokyo's Nikkei index 5.8 percent higher.
The response was more muted in other parts of the region, with South Korea's KOSPI index up 1.6 percent, Australia's All Ordinaries down 1.1 percent, the Taiwan Weighted flat and Singapore's Straits Times index up 1.3 percent.
In Mumbai, the BSE SENSEX was up 4.6 percent.
European markets were stronger across the board, with London's FTSE 100, the Paris CAC 40 and Frankfurt's CAC 30 all closing up by around 1 percent.
Major U.S. markets closed down though after Monday brought a heavy spate of corporate news, including the huge restructuring of AIG, bankruptcy for national electronics chain Circuit City and more weakness for the automakers
The Dow Jones lost 0.8 percent, the Nasdaq 1.8 percent and the S&P 1.3 percent.
"When the top companies are giving the kind of guidance they're giving and announcing layoffs, that tells you we are looking at at least a few more quarters of this recession," said John Wilson, chief technical strategist at Morgan Keegan.
The Chinese stimulus package includes loosening of credit restrictions, tax cuts and a massive infrastructure spending program, according to China's Xinhua news agency.
The money will be spent over the next two years to finance several areas, including low-income housing, technological innovation and rebuilding from several disasters -- including the May 12 earthquake in Sichuan province that killed nearly 70,000 people.
The plan was approved Sunday by the State Council.
The growth in China's economy slowed for the first nine months of 2008 compared to the same period last year, officials reported in late October, but still increased by nearly 10 percent.