HONG KONG (AFP) - Asian stocks closed mostly down Tuesday as investors worried about the cooling world economy, disappointing corporate profits and crucial upcoming interest rate decisions. Hong Kong and Taiwan led the decliners among major regional bourses, falling 2.5 percent. Poor results from banks such as HSBC and Bank of East Asia helped push the Hong Kong bourse lower. The mainland Chinese stock market fell more than 1.8 percent, with investors concerned that an upcoming flotation would drain demand for other shares. A troubled build up to the start of the Olympic Games in Beijing on Friday also dampened the mood. Elsewhere, Australia fell 1.4 percent on falling commodity prices and after the country's central bank left interest rates at a 12-year-high of 7.25 percent but signalled rate cuts ahead as economic growth slows. The bourses in Singapore and South Korea also ended in the red, although Indian shares rose more than 2.5 percent. Indonesia led the decliners among the smaller markets, falling 1.9 percent after the country's central bank raised interest rates to try and tame inflation. The market in Wellington also finished down, with officials and economists saying New Zealand was likely to become the second developed country to slide into recession this year. Investors were looking ahead to a US interest rate decision due later Tuesday. The Federal Reserve is expected to keep borrowing costs unchanged at two percent. The US is struggling to overcome the default crisis among so-called "subprime" " or riskier " mortgages, which has inflicted huge financial losses and ballooned into a global credit crunch. Investors have been worrying about inflation at the same time, but such concerns have begun to wane a little following a slide in oil prices to under 120 dollars per barrel Tuesday from record levels above $147 last month. Meanwhile, Europe's main stock markets rebounded strongly on Tuesday as inflationary concerns eased with tumbling oil prices and the banking sector rose amid bumper profits at Standard Chartered, traders said. In late morning trading, the FTSE 100 index of top companies stood at 5,377.10 points, a rise of 1.07 percent from Monday's close. Frankfurt's DAX 30 jumped by 2.26 percent to 6,493.50 points and in Paris, the CAC 40 rallied 1.31 percent to 4,336.53. The Euro Stoxx 50 index of leading eurozone shares advanced 1.77 percent in value to stand at 3,347.62 points. The European single currency fell to 1.5496 dollars, as traders awaited a US interest rate decision on Tuesday. Strong gains for European equities contrasted with Tuesday's performance in Asia, where Japanese share prices lost ground for a third straight session. US stocks had fallen on Monday as the market widely expected the Federal Open Market Committee to leave the US central bank's key short-term interest rate at 2.0 percent, given the weakness of the world's biggest economy. World oil prices fell back below 120 dollars a barrel on Tuesday, a day after hitting the trough for the first time for three months, as slowing US demand for energy offsets tensions over crude-rich Iran, traders said. Meanwhile in London equities trading on Tuesday, the share price of British bank Standard Chartered surged 4.50 percent higher to 1,487 pence. The emerging markets bank said that its net profit had jumped by 32 percent to 1.844 billion dollars (1.19 billion euros) in the first half of 2008 as it shook off the credit crunch. "These would be great results in any year; this year, they are exceptional," the bank's chairman Mervyn Davies said in comments accompanying its earnings statement. "We have a strong and sustainable business, guided by a clear and consistent strategy and we enter the second half in good shape," he added. Standard Chartered said its profits rise came despite a 35 percent jump in impairment charges, or loans written off, to 491 million dollars in the six months to June 30 compared with the first half of 2007. Although other global banks are posting hefty losses, Standard said it was succeeding thanks to its push into Asia, Africa and the Middle East " markets which are not directly affected by the "liquidity crunch" in the West. Other banks' share prices were boosted on Tuesday following Standard's rosy performance, with Barclays rocketing 5.45 percent to 357.75 pence and Royal Bank of Scotland winning 3.95 percent to 223.50 pence in London. Deutsche Bank climbed 4.0 percent to 60.15 euros in Frankfurt while in Paris, Societe Generale won 6.22 percent to 63.20 euros. The French lender surged despite reporting a 63-percent slump in second-quarter profit on Tuesday.