GLOBAL MARKETS-Asian stocks bounce back on Fed cash injection

                                
 (Updates prices, details; adds European share pre-open)
                                
 By Rafael Nam
                                
 HONG KONG, March 12 (Reuters) - Asian shares rebounded from
a recent slump on Wednesday after the U.S. Federal Reserve and
other central banks teamed up to inject hundreds of billions of
dollars in new funds into cash-starved credit markets.
                                
 European shares were set to rise, with Britain's FTSE 100
<.FTSE> seen opening up as much as 1.4 percent, Germany's DAX
<.GDAXI> seen up as much as 1.7 percent and France's CAC-40
<.FCHI> seen gaining up to 1.8 percent.
                                
 But the U.S. dollar slid, paring back its rally against the
euro on Tuesday, amid scepticism that the Fed's steps will
solve the fundamental problems faced by credit markets. and on
continued concerns over a potential U.S. recession.
                                
 Investors also opted to maintain their hedging against
inflation, with oil prices steady within a record of near $110
a barrel hit in the previous session, while gold edged higher.
                                
 "The Fed's decision to get funds for credit markets has
soothed investor sentiment," said Hwang Geum-dan, an analyst at
Samsung Securities in Seoul.
                                
 "Fundamentals remain grim, and questions about where the
global economy and inflation are headed still remain
unanswered."
                                
 The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose 2.1 percent by 0640 GMT.
                                
 The benchmark hit a seven-week low on Tuesday, and is still
down around 13 percent this year as a U.S.-led global economic
slowdown and more writedowns in financial firms worldwide are
coming just as the region is grappling with rising inflation.
                                
 Japan's Nikkei average <.N225> rose 1.6 percent, helped by
revised data showing the economy grew a surprisingly strong 0.9
percent in the last quarter of 2007. [ID:nT205169]
                                
 Stocks in Australia <.AXJO>, Singapore <.FTSTI> and India
<.BSESN> rose more than 2 percent each.
                                
 South Korea <.KS11> and Hong Kong <.HSI> were up more than
1 percent, while Taiwan <.TWII> shares gained 0.6 percent.
                                
 But China's shares <.SSEC> dropped 2 percent as investors
worry about more tightening measures to combat rising
inflation.
                                
 Financial stocks across the region such as South Korea's
Kookmin Bank <060000.KS> led gainers, while Japanese exporters
such as Toyota Motor Corp <7203.T> also rallied as the dollar's
firmer tone against the yen <JPY=> would boost export earnings.
                                
 DOUBTS REMAIN
                                
 The rise in Asian stocks came after major central banks,
led by the Federal Reserve, injected hundreds of billions of
dollars in fresh funds into cash-starved credit markets.
[ID:nN11555562]
                                
 But continued signs the region's previously red hot
economic growth is slowing down at a time of rising energy and
food costs could prevent further equity market gains, analysts
said.
                                
 India's industrial output grew 5.3 percent in January from
a year earlier, slowing sharply from the previous month,
according to data on Wednesday. [ID:nDEL001207]
                                
 A survey on Wednesday showed Australian consumer sentiment
slumped in March to its lowest in more than 14 years, while an
index in China for January showed the weakest confidence in
five years. [ID:nSYD295929] and [ID:nPEK183613]
                                
 Japan is facing headaches of its own, despite the
stronger-than-expected final estimate for the fourth quarter.
                                
 Analysts warn of a slowdown in the country's economy early
this year, while the world's second-biggest economy faces a
potential void atop the Bank of Japan at a time when central
banks are working together to help stem a global credit crisis.
                                
 Opposition lawmakers on Wednesday vetoed the Japanese
government's pick for central bank governor, Toshiro Muto,
leaving the country with no successor to Toshihiko Fukui one
week before he retires. [ID:nT24461]
                                
 DOLLAR SLIPS
                                
 The dollar edged down 0.4 percent to 102.91 yen <JPY=>,
reversing into its biggest one-day rise versus the Japanese yen
since August 2007 struck on Tuesday. The U.S. currency hit an
eight-year low of 101.40 yen on Friday.
                                
 The euro edged up 0.3 percent from late U.S. trade to
$1.5373 <EUR=>, not far from a record high of $1.5496 hit on
Tuesday.
                                
 "To many, the latest (central bank) measures merely address
the symptoms and not the cause of the credit crunch problem,"
analysts at DBS said in a research note.
                                
 "Like measures in the past, this exercise is seen as
another attempt to buy time."
                                
 U.S. crude futures <CLc1> steadied at $108.73, stopping a
drop that had seen prices retreat from a record $109.72 hit on
Tuesday, before the Fed announced its liquidity measures.
                                
 Gold <XAU=> firmed to $974.20/$975.00 an ounce, up from
around $971.40 in late trade in New York on Tuesday, and again
approaching the record $991.90 on March 6.
                                
 Japanese government bond futures steadied from earlier
sharp falls, with June 10-year futures <2JGBv1> down 0.06 point
at 139.44, recovering from an intraday low of 138.98.