TOKYO, Oct 30 (Reuters) - Daiwa Securities Group (8601.T: Quote, Profile, Research), Japan's second-largest brokerage, reported a second straight quarterly profit, helped by a rebound in the stock market and demand for investment trusts from retail investors.

Daiwa posted a 2 billion yen ($21.93 million) net profit for July-September, compared with a 20.6 billion yen loss a year earlier.

Three analysts surveyed by Thomson Reuters I/B/E/S produced an average profit estimate of 7.1 billion yen.

Daiwa's rebound comes as Japan's benchmark Nikkei average .N225 has recovered from a 26-year closing low hit on March 6, with investors having turned more optimistic about prospects for a global economic recovery and become willing to take on more risk.

But there is also a concern Daiwa may lose revenue after last month deciding to pull out of its 10-year-old investment banking joint venture with Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research), leaving the brokerage vulnerable as competition intensifies.

SMFG, Japan's third-largest bank, expanded its brokerage business by buying Nikko Cordial Securities from Citigroup (C.N: Quote, Profile, Research) and launching underwriting and corporate advisory businesses this month.

Daiwa shares are down about 9.3 percent so far this year, underperforming Tokyo's brokerage sector subindex , which lost 3.6 percent. ($1=90.72 Yen) (Reporting by Junko Fujita; Editing by Muralikumar Anantharaman)