Asia Pacific markets rose sharply after Fed liquidity infusion (MarketWatch) (12-03-2008)

HONG KONG (MarketWatch) -- Asian stocks staged a massive rally on Wednesday, although early gains were pared later in the day, however major indices ended the day in positive territory

Tokyo's Nikkei 225 Average ended 1.6% higher, rising 202 points to 12,861.13, cooling from its early sprint up more than 3%. The broader Topix index added 1.6% to 1,255.13.

Australia's S&P/ASX 200 closed 2.4% higher, gaining 123 points to 5,257.90. It, too, had risen more than 3% in the early hours.

The rally follows a sharp advance on U.S. and European stock markets Tuesday after the Federal Reserve moved to provide additional liquidity to credit markets by lending as much as $200 billion in securities to primary dealers in the bond market.

In Japan one of the developing stories relates to who will head up the nation's central bank after the opposition-controlled upper parliament Wednesday blocked the government's nomination of Toshiro Muto. The veto raises the likelihood the Bank of Japan will see a leadership vacuum when Gov. Toshihiko Fukui steps down next week.

China's markets were more restrained in their response to the Fed's actions, with the Shanghai Composite Index giving up early gains to end 2.3% lower.

Hong Kong's Hang Seng Index climbed 1.2% to 23,262.49%. The Hang Seng China Enterprises Index, or shares of mainland-incorporated companies listed in Hong Kong, was up 1.2% to 12,818.24.

In Tokyo, shares of Mitsubishi UFJ climbed 4.7% while Mizuho Financial Group was up 4%.

Source: MarketWatch