Asian markets rallied strongly then came off lows (MarketWatch) (23-01-2008)

HONG KONG (MarketWatch) - Markets in Asia gained following the emergency rate cut by the Fed then retreated from intraday highs during the session on Wednesday.

Hong Kong and Australian shares ended sharply higher, having recovered a part of their steep losses in the previous session. Taiwanese stocks dropped in the afternoon, while Japanese shares gave up a large part of their early gains and mainland China stocks recovered losses before closing.

Japan's Nikkei 225 average gained 0.8% at 12,676.79, unable to sustain the day's gains after rising as high as 13,063.78 during the session. The broader Topix index gained 1.5% at 1,237.20.

Hong Kong's Hang Seng index rose 2,332.54 or 10.72% to 24,090.17 after dropping as much as 8.7% in the previous session. The Hang Seng China Enterprises index soared 11.48% or 1,367.62 to 13,279.53.

Australia's S&P/ASX 200 gained 4.35% or 225.50 points to 5,412.30, snapping a 12-day losing streak.

India's Sensitive Index, one of the biggest losers in Asia during the two previous sessions, closed up by 6.05% or 1,011.62 at 17,741.56.

Following the Fed's surprise move, the Hong Kong Monetary Authority early Wednesday cut a key short-term interest rate also by 0.75 percentage points to 5%, according to reports. Hong Kong, which pegs its currency to the U.S. dollar, usually follows the U.S. interest rates movements with similar moves of its own.

In Tokyo, the recovery was broad-based, with banking major Mitsubishi UFJ Financial Group gaining 3.94%, Mizuho added 2.58%, while Sumitomo lost 1.12%. Among exporters, Nintendo Co. soared 5% to lead exporter stocks. Nintendo's gains were helped by a news service report that sales of its Wii game consoles topped five million since its launch in December 2006.

In Sydney, the beaten-down resource stocks led the surge, with Rio Tinto stock climbing 4%. Shares of mining giant BHP Billiton jumped 8.3% after its quarterly iron ore production reportedly touched a record high.

In Hong Kong, the advance was led by market heavyweights such as HSBC Holdings, China Mobile and PetroChina Co., which had suffered steep losses recently.

Source: MarketWatch