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* Asia shares rally on Citigroup rescue relief
* Nikkei, other major indexes up about 4 pct
* Risk aversion recedes, safe havens such as bonds shunned
* Oil steadies after previous day surge
By Rafael Nam
HONG KONG, Nov 25 (Reuters) - Asian shares surged on
Tuesday in line with global peers and so-called safe haven
assets such as bonds were shunned after the U.S. rescue of
Citigroup <C.N> bolstered badly needed confidence in the
broader banking sector.
The yen recovered from sharp day-earlier falls to edge up
against major currencies, but traders said the Japanese
currency's recent gains from safe-haven bids were likely to
pause in the near term as the willingness to take risks
returns.
Oil prices steadied at around $54 a barrel after surging
more than 9 percent in the previous session, a rally that was
big enough to send regional commodity-related stocks such as
BHP Billiton <BHP.AX> sharply higher.
"Expectations for the new U.S. administration were a major
factor while the Citi bailout news also helped. Gestures shown
by (President-elect Barack) Obama and his team this week were
aggressive and gave assurance to investors," said Kim June-kie,
a market analyst at SK Securities in Seoul.
"However, worries and uncertainties still exist. In the
U.S., the auto industry is restructuring and late payments by
credit card holders are mounting," he added.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> rose 3.8 percent as of 0150 GMT, heading
towards a third consecutive daily gain.
Japan's Nikkei average <> jumped nearly 4 percent,
resuming trading after a public holiday on Monday.
The broader market rally comes after an initial tepid Asian
reaction to a U.S. plan, announced on Monday, to shoulder most
losses on about $306 billion of Citigroup's risky assets and
inject capital into the struggling lender.
But a subsequent Wall Street rally, which capped the best
two-day run since the aftermath of the 1987 stock market crash,
put these doubts to rest, sparking optimism the U.S. government
could step in to support other big banks,
The rally in global markets was also helped after Obama
promised to jolt the faltering U.S. economy with a stimulus
package, raising the outlook for beleaguered exporters
worldwide.
Shares in South Korea <> and Australia <> rallied
about 4 percent each, while markets in Taiwan <> and
Singapore <.FTSTI> gained 2-3 percent. Hong Kong <> was
seen opening up 4.5 percent, but Shanghai's main index <>
rose a modest 1.3 percent.
Gains in Asia were led in part by banking shares such as
South Korea's KB Financial Group <105560.KS> and Commonwealth
Bank of Australia <CBA.AX> recovering from steep falls on
Monday.
REDISCOVERING RISK
Investors went from buying assets perceived as safe havens
during the uncertain period in the lead-up to Citigroup's
rescue to shunning them on Tuesday.
Regional bonds largely fell.
December 10-year Japanese government bonds (JGB) futures
<2JGBv1> dropped by as much as 0.54 point before recovering to
be down just 0.15 point from the previous close, to 139.15.
The benchmark 10-year JGB yield <JP10YTN=JBTC> rose 2.5
basis points to 1.415 percent, pulling up from a six-week low
of 1.375 percent hit on Friday.
The yen edged up against major currencies though some
traders attributed that to adjustments after the Japanese
currency fell around 5 percent on Monday.
The euro was down 1 percent against the yen at 124.70 yen
<EURJPY=>. The dollar was down 0.5 percent at 96.83 yen <JPY=>,
but above Monday's low near 95 yen.
The euro was down 0.5 percent at $1.2896 <EUR=>, off a
2-week high of 1.2955 hit on Monday.
Oil prices <CLc1> retreated around half a dollar to $53.90
a barrel after surging more than 9 percent on Monday when OPEC
President Chakib Khelil said a further cut in crude output
would be necessary. Oil had tumbled to a 3-
