* Asia shares cut losses on Citi rescue; doubts remain
* U.S. futures gain, European stocks seen opening higher
* Yen holds gains on continued risk aversion
* Gold retreats after rally; safe-haven bid to return
By Rafael Nam
HONG KONG, Nov 24 (Reuters) - Asian shares pared losses and
U.S. stock futures gained on Monday after the U.S. government
rescued Citigroup <C.N> with a plan that was seen providing a
template for other banks facing losses from toxic investments.
European shares were set to gain 4-5 percent at the open,
while oil prices rose on hopes that OPEC will cut output as
early as this week to shore up crude prices that have tumbled
to their lowest in more than three years.
But earlier gains on global markets following the Citigroup
announcement faded, while so-called safe-haven assets such as
the yen held firmer, signalling that concerns about the broader
financial sector and the global economy are likely to remain.
"The reaction so far has been relatively muted because
maybe there are as many questions about this as there are
answers in terms of saving and stabilising Citigroup," said
Tony Morriss, a senior currency strategist at ANZ Bank in
Sydney.
"Does this mean support for other financial institutions
will be this big? Does this mean there will be more problems
around calculation of so-called toxic assets? It's too early to
say."
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> briefly posted a small gain after the Citigroup
news, but was down 0.7 percent at 0720 GMT.
That was an improvement from early in the session, when the
index fell as much as 1.7 percent. Japanese markets were closed
for a public holiday.
The U.S. Treasury Department said it would prop up
Citigroup with more than $300 billion in the largest bailout
for a sector crippled by exposure to toxic mortgage debts and a
crumbling U.S. economy. []
Australian stocks <> reversed earlier losses to close
0.3 percent higher. U.S. stock futures firmed, with the S&P 500
December 500 futures <SPc1> up 0.7 percent and the Dow Jones
futures index <DJc1> up 0.05 percent.
Indexes elsewhere cut losses, but remained in negative
territory, with Hong Kong <>, India <> and Singapore
all falling more than 1 percent.
South Korean shares <> shares and Chinese shares
<> lost more than 3 percent.
Reports that U.S. New York Federal Reserve President
Timothy Geithner will be nominated as U.S. Treasury Secretary
boosted Wall Street on Friday, but had less of an impact in
Asia, which had already ended last week higher as investors
thought recent falls to five-year lows were excessive.
ASIAN BANKS HIT
Shares in Asian banks such as South Korea's KB Financial
Group <105560.KS>, Commonwealth Bank of Australia <CBA.AX> and
Hong Kong-listed HSBC <0005.HK> fell amid concerns about how
much capital the broader financial sector will need.
Asia-focused lender Standard Chartered <STAN.L> announced a
1.8 billion pound ($2.7 billion) rights issue aimed at
strengthening its balance sheet, reinforcing expectations other
global lenders will also need to raise money.
Other sectors such as U.S. automakers are seen struggling,
too, reinforcing concerns about a weak global economy.
The yen held on to earlier gains, reflecting investors'
continued aversion to risk. Safe-haven capital flows have
benefited the Japanese currency as investors, in times of
stress, tend to sell assets financed with the cheaply-borrowed
yen.
The dollar traded at 95.23 yen <JPY=> on Monday versus the
94.94 quote in late New York trade on Friday.
Gold slipped $11.65 to $787.80 an ounce after earlier
rising to a 5-week high above $800, but analysts said continued
turmoil in global markets could spur another round of
safe-haven buying.
Gold posted its biggest daily percentage gain in almost two
months on Friday.
"There was a lot of disinvestment from gold, and I think
when the opportunity arrives, we might see investors diversify
back into gold," said David Moore, commodities analyst at CBA
in Sydney. "I think it's quite possible gold will continue to
firm."
Oil prices <CLc1> rose 43 cents to $50.35 a barrel amid
expectations the Organization of Petroleum Exporting Countries
could announce a production cut when it meets on Saturday in
Cairo.
