* Asia shares gain on relief at Citigroup rescue
* Nikkei gains 5.2 pct, other major indexes up 2-5 pct
* Risk aversion recedes, safe havens such as bonds shunned
* Oil, gold fall after previous day surges
(Corrects BHP-Rio Tinto takeover offer value to $66 billion
from $58 billion in paragraph 14)
(Updates with Asian prices, European pre-open, new quotes)
By Rafael Nam
HONG KONG, Nov 25 (Reuters) - Asian shares rallied and
bonds fell after the U.S. government rescued banking giant
Citigroup <C.N> in a bid to prevent further damage to the
ailing global financial system.
But European shares were set for a tepid start, with
Britain's FTSE 100 <> seen between down 4 points to up 3
points.
The yen edged up 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 from
so-called safe havens such as bonds.
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 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.
China's growth could well slow to its weakest pace in
almost two decades next year, the World Bank said, the latest
grim prognosis for a global economy buckling despite the
concerted efforts of policymakers.
"What we are seeing is just short-term optimism and hope.
Economic data from the U.S., Japan is not encouraging. So, the
future is not promising," said Amitabh Chakraborty,
president-equities at Religare Securities in India.
The MSCI index of Asia-Pacific stocks excluding Japan
<.MIAPJ0000PUS> rose 3.8 percent as of 0700 GMT, heading
towards a third consecutive daily gain.
Japan's Nikkei average <> jumped 5.2 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
4-5 percent each, while markets in Taiwan <>, Singapore
<.FTSTI> and India <> rose over 2 percent.
The world's largest miner, BHP Billiton, ended 12.2 percent
higher in Sydney, but after the market close it announced that
it was pulling the plug on its long-standing $66 billion bid
for rival Rio Tinto <RIO.AX> <RIO.L>, citing worsening
conditions in metals markets and demands for asset sales from
European competition regulators. []
South Korea's KOSPI index <> advanced 1.4 percent, but
Shanghai's index <> fell 0.4 percent.
Gains in Asia were led in part by banks such as South
Korea's KB Financial Group <105560.KS> and Commonwealth Bank of
Australia <CBA.AX>, which recovered from steep falls on Monday
as worries about slowing economic growth and rising bad debts
weighed on the battered financial sector.
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 World Bank also cut on Tuesday its 2009 growth forecast
for China, which along with the United States, is a key export
market for Asia. []
On the corporate front, Australia's Qantas Airways
<QAN.AX>, and Japan's Honda Motor <7267.T> were among the
latest companies in the region to warn of a toughening outlook.
[]
"Though U.S. shares may rise a bit more, these gains are
likely to be limited by concern about more bad indicators that
will show the poor state of the economy," said Yutaka Miura,
senior technical analyst at Shinko Securities in Japan.
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 0.26 from the prior close at 139.04. The benchmark
10-year JGB yield <JP10YTN=JBTC> rose 1.5 basis points to 1.405
percent.
The yen rose though some traders attributed that to
adjustments after the currency fell around 5 percent on Monday.
The euro was down 1.6 percent against the yen at 123.92 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 1 percent at 96.31 yen <JPY=>.
Oil prices <CLc1> retreated 86 cents to $53.65 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-
