* Asia shares gain on Citigroup rescue relief
* Nikkei, other major indexes up 2-3 pct but off early
highs
* Risk aversion recedes, safe havens such as bonds shunned
* Oil, gold fall after previous day surges
(Repeats to more subscribers, updates with latest Asian
prices, new quotes)
By Rafael Nam
HONG KONG, Nov 25 (Reuters) - Asian shares rose on Tuesday
and so-called safe haven assets such as bonds fell after the
U.S. government rescued banking giant Citigroup <C.N> to
prevent further damage to the ailing global financial system.
The yen recovered from sharp falls a day earlier and gained
against major currencies, but some traders said the Japanese
currency could stall in the near term if investors continued to
return to battered equity markets and other riskier assets.
Oil prices retreated below $54 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.
But shares gave up some of their early gains as plenty of
near-term risks remained, including whether other global
lenders are in need of rescue, the fate of U.S. auto makers
and
indicators that continue to signal a rough road ahead for the
global economy.
"It will take a long time to bring the financial system
back to health, as it happened in Japan, and it's hard to
believe market sentiment will turn around quickly," said Hideki
Amikura, deputy general manager of the forex section at Nomura
Trust Bank.
Japan suffered a "lost decade" in the 1990s after a real
estate estate bubble burst, sparking a banking crisis and
economic stagnation marked by deflation.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> rose 2.9 percent as of 0400 GMT, heading
towards a third consecutive daily gain, but off earlier gains
of as much as 4.3 percent.
Japan's Nikkei average <> jumped nearly 3 percent,
resuming trade after a public holiday on Monday.
The broader market rally comes after an initially tepid
Asian reaction to the U.S. plan, announced early on Monday
Asian time, to shoulder most potential 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 some of those doubts to rest, sparking optimism the U.S.
government could similarly step in to support other big banks.
The rally in global markets was also helped after U.S.
President-elect Barack Obama promised to jolt the faltering
U.S. economy with a stimulus package, raising the outlook for
beleaguered exporters worldwide who depend heavily on U.S.
consumer demand. []
Shares in Australia <> and Hong Kong <> rallied
more than 3 percent each, while markets in Taiwan <> and
Singapore <.FTSTI> rose over 2 percent.
South Korea's KOSPI index <> was up about 2 percent,
with Shanghai's index <> up only 0.1 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>, which recovered from steep falls on
Monday.
REDISCOVERING RISK?
Investors went from buying assets perceived as safe havens
during the uncertainty in the lead-up to Citigroup's rescue to
shunning them on Tuesday. The question is how long it will
last.
Data continues to confirm the weakness of the global
economy. South Korea on Tuesday said consumer confidence
slumped to a four-month low in November, while in Germany,
corporate sentiment plunged to its lowest level in nearly 16
years this month. [] and []
"The overall weakness in the economy has been limiting
gains," said Y.K. Chan, a strategist with Phillip Capital
Management in Hong Kong.
"The market could still fall below its October low in the
absence of new stimulus measures from the U.S. and China."
Still, 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 T0.17 point from the previous close at 139.13.
The benchmark 10-year JGB yield <JP10YTN=JBTC> rose 3.0
basis points to 1.420 percent, pulling up from a six-week low
of 1.375 percent hit on Friday.
The yen rose against major currencies though some traders
attributed that to adjustments after the currency fell around 5
percent on Monday.
The euro was down 1.2 percent against the yen at 124.50 yen
<EURJPY=> after the single currency rose on Monday from a low
around 119.60 yen to a high above 126 yen.
The dollar was down 0.6 percent at 96.76 yen <JPY=>, but
above Monday's low near 95 yen.
Oil prices <CLc1> retreated 88 cents to $53.60 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-
