HONG KONG - ASIAN shares roared back to life on Wednesday, sparking a 3 per cent rally in Japan's Nikkei, after the US Federal Reserve and other central banks teamed up to inject liquidity into strained credit markets.

The US dollar steadied after it rallied on Tuesday from record lows against the euro and near 8-year lows against the Japanese yen.

Oil prices were steady in Asia, having backed off a record high near US$110 (S$152) a barrel the previous day as the dollar rallied, while gold prices continued a retreat from a record high seen last week.

'The Fed's move will help ease tight credit conditions at financial institutions, but it is not something that solves the real problems,' said Mr Yutaka Miura, senior technical analyst at Shinhko Securities in Japan.

Asian stocks have fallen hard this year and the dollar has hit record lows against major currencies on fears the United States is slipping into recession and the global credit crisis could deepen.

The MSCI index of Asian stocks outside Japan rose close to 3 per cent, bouncing back after hitting a seven-week low on Tuesday.

The rise in Asian stocks came after major central banks, led by the Federal Reserve, teamed up to get hundreds of billions of dollars in fresh funds into cash-starved credit markets.

The moves will allow financial firms to use securities backed by mortgages as collateral for central bank loans.

'The Fed's new mortgage put has, like the proverbial butterfly flapping its wings, triggered a strong wind overnight where we see even turkeys flying,' wrote Mr Brett Williams, a BNP Paribas credit analyst to clients. 'Appetite for risk roared back from another creative liquidity scheme by the US central bank.'

SINGAPORE
Singapore stocks opened higher with the benchmark Straits Times Index up 3.61 per cent, following a US stocks rally after the Federal Reserve said it would inject liquidity to help credit markets.

By mid-morning, the STI was 76.27 points or 2.7 per cent higher at 2,937.12.

Top gainers included Jardine C&C, City Development and DBS.

Some 677.6 million shares exchanged hands. Gainers beat losers 4 to 1.

KUALA LUMPUR
Malaysia's stock market rose 3.1 per cent in early trade Wednesday, recovering from post-election losses with the help of strong gains on Wall Street overnight, dealers said.

'Today's rebound is mainly due to the rally on Wall Street,? said Mr Kaladher Govindan, head of research at TA Securities. 'Gains in the bourse are also due to a technical rebound,' he added.

Ninety minutes after the opening bell, the Kuala Lumpur Composite Index was up 37.91 points at 1,244.45.

On Monday the market plunged more than 10 per cent during the session, triggering a one-hour trading suspension due to unprecedented election losses for the ruling government.

'The technical rebound will be followed by profit-taking,' Mr Kaladher said.

HONG KONG
Hong Kong stocks jumped more than 3 per cent in early trade on Wednesday, pacing gains in global markets, as investors cheered the move by central banks to get hundreds of billions of dollars in fresh funds to beleaguered credit markets.

The benchmark Hang Seng Index opened up 3.2 per cent at 23,737.65. The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, was up 3.5 per cent at 13,030.88.

SHANGHAI
Chinese share prices opened 1.01 per cent higher on Wednesday led by financial and energy stocks with investors taking cue from strong gains on Wall street, dealers said.

Shares received a boost after the Dow Jones Industrial Average jumped 3.55 per cent on Tuesday on a US Federal Reserve plan to inject US$200 billion into the market to help struggling banks and mortgage providers.

The benchmark Shanghai Composite Index, which covers both A and B shares, rose 41.96 points to 4,207.84.

The Shanghai A-share Index rose 44.03 points or 1.01 per cent to 4,414.92 points while the Shenzhen A-share index was up 7.88 points or 0.56 per cent to 1,402.23.

TOKYO
Japanese stocks jumped more than 2 per cent on Wednesday following a rally on Wall Street after the Federal Reserve moved to provide additional liquidity to credit markets.

Toyota Motor Corp and other exporters pulled ahead, helped also by the dollar regaining some ground against the yen.

Bank shares, among the hardest hit in recent sessions, soared. No. 3 lender Sumitomo Mitsui Financial Group jumped 7 per cent.

The benchmark Nikkei ended the morning session up 2.7 per cent at 12,999.84. The broader Topix index also gained 2.7 per cent to 1,268.25.