HONG KONG, CHINA - ASIAN stocks surged on Wednesday as big US interest rate cuts and surprisingly resilient results from two top US investment banks revived financial shares that had suffered heavy losses.

But the dollar eased somewhat - a day after posting its biggest one-day gain against the yen in a decade - as Japanese exporters rushed to sell, though it remained well above recent lows hit against other currencies.

Gold and bonds also slid as their recent safe-haven appeal dimmed, while oil retreated from a jump on Tuesday.

'The Fed is showing strong leadership in addressing these issues they are having and the market is being buoyed by the fact that it is willing to move fairly quickly,' said Mr Tony Russell, senior equities adviser at ABN AMRO Morgans in Australia.

'It's very good to see a strong bounce to the market but I don't think we're out of the woods just yet.'

The MSCI's measure of Asian stocks outside Japan rose 2.1 per cent as of 9.05am Singapore time.

The Federal Reserve slashed US interest rates on Tuesday by a hefty three-quarters of a percentage point. The cut was less than many traders had expected but comes on the heels of emergency measures over the weekend to ease the liquidity crisis in credit markets.

The Fed has now cut rates by an aggressive 3 percentage points since mid-September, including 2 points since the start of the year.

Before the move, investors had reacted with jubilation after Goldman Sachs and Lehman Brothers had topped forecasts, although their quarterly profit had more than halved.

The news was well received by investors who had fretted about more casualties from the credit crisis following the fire sale of Bear Stearns to JPMorgan Chase on Sunday.

Shares in Asian financial firms such as South Korea's Kookmin Bank and Japan's Mitsubishi UFJ Financial Group surged.

Though regional banks have been spared the extent of writedowns seen at European and US counterparts their shares have suffered from the spreading credit crisis.

KUALA LUMPUR
The Kuala Lumpur Composite Index (KLCI) rose 24.33 points at 1,204.35 at the opening.

HONG KONG
Hong Kong stocks surged on Wednesday after the Federal Reserve delivered a hefty rate cut, and heavyweight China Mobile jumped at the open ahead of its earnings report due later in the day.

The benchmark Hang Seng Index opened up 3.8 per cent at 22,191.88. The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, was up 5.7 per cent at 11,702.71.

SHANGHAI
Chinese share prices opened 1.74 per cent higher on Wednesday with investors taking their cue from strong gains on Wall Street sparked by a rate cut, dealers said.

Shares received a boost after the Dow Jones Industrial Average rallied 420.41 points or 3.51 per cent on Tuesday as the Federal Reserve slashed interest rate by 75 basis points to offset a broadening credit crunch.

The benchmark Shanghai Composite Index, which covers both A and B shares, rose 63.86 points to 3,732.76.

The Wall Street lead may offset the latest policy tightening moves out of China - a 50 basis point hike in the bank reserve requirement, which will take effect on March 25.

Analysts said bank lending could be undermined due to the tighter liquidity conditions, but the overall negative impact on A-share prices is seen as limited.

The Shanghai A-share Index rose 66.98 points or 1.74 per cent to 3,917.76 points while the Shenzhen A-share index was up 21.48 points or 1.89 per cent at 1,160.66.

TOKYO
Japan's Nikkei share average jumped 2.8 per cent on Wednesday, tracking steep gains on Wall Street after solid results from two top investment banks soothed investor nerves after Bear Stearns' sudden downfall.

The dollar's overnight gains also helped exporters, with digital camera maker Canon rising more than 7 per cent and Honda Motor Co Ltd up nearly 6 per cent.

The benchmark Nikkei ended the morning session up 328.57 points at 12,292.73 after rising as high as 12,374.75. The broader Topix was up 3 per cent at 1,198.67.

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