* Materials, financial sectors lead stocks despite gloom
* HSBC clings to gains ahead of $18 bln rights issue
* Nikkei up 4.5 pct, bounces from 26-year closing low
* U.S. dollar gains after China exports tumble in Feb
(Updates prices, adds European outlook)
By Kevin Plumberg
HONG KONG, March 11 (Reuters) - Asia stocks rose on
Wednesday after hopes Citigroup will deliver a first-quarter
profit sparked an improvement in investor confidence, though
grim Chinese export data sent dealers buying the U.S. dollar
for safety.
While Beijing's efforts to prop up the economy were
expected to really take hold in the third quarter, near-term
prospects were in jeopardy as both exports and imports fell for
a fourth consecutive month.
Major European stock markets were expected to rise as much
as 0.9 percent, according to financial bookmakers, on nascent
optimism for bank stocks, though UBS AG <UBSN.VX> warned before
the market opened that its earnings will remain at risk for
some time because of vulnerabilities on its balance sheet.
[]
Citi, whose share price traded below $1 for the first time
last week, was profitable in the first two months of 2009, the
bank's chief executive said in a memo to staff, heaping
pressure on the firm to post a quarterly profit after chalking
up losses in the last five quarters totalling around $37.5
billion. []
Wall Street jumped 6 percent in heavy volume overnight
<.SPX>, helped by Citi and comments from an influential U.S.
congressman that rules against short selling of stocks may be
re-implemented in a month. []
Asia's equity rally by comparison was tempered by questions
over the nature of Citi's profits.
"With the U.S. government still examining ways to stabilise
the bank if needed, we remain somewhat sceptical and are wary
of the rally we have seen today in the equity markets which
reminds us of the previous rounds of dead cat bounces we have
witnessed," economists with United Overseas Bank in Singapore
said in a note.
Japan's Nikkei share average <> rose 4.5 percent in
moderate trading volume, rebounding from a 26-year closing low
plumbed on Tuesday.
Shares of Toshiba Corp <6502.T> climbed 9.5 percent after
the top Japanese business daily reported it would likely see an
operating profit of $1 billion next business year, contrasting
with analysts' expectations for a loss. []
Australia's benchmark S&P/ASX 200 index <> rose 1.9
percent, helped by miners BHP Billiton Ltd <BHP.AX> and Rio
Tinto Ltd <RIO.AX>, which benefited from a rise in metals
prices.
The MSCI index of Asia Pacific stocks outside Japan
<.MIAPJ0000PUS> climbed 2.3 percent, led by the materials and
financial sectors.
Tuesday's 5.1 percent rise on the MSCI all-country world
stocks index <.MIWD00000PUS> was the biggest daily gain in
three months.
A 4.4 percent rise in HSBC <0005.HK> led Hong Kong's Hang
Seng index <> up by 2.2 percent and trimmed steep losses on
the week ahead of its $18 billion rights issue.
The bank's Asia chief executive in a news briefing on
Tuesday said the rights issue was going "extremely well so
far."
GLOOMY CHINA TRADE DATA
While the Citi news brightened views on stability in the
banking industry, the economic picture was darkening.
Japanese wholesale prices in February fell at the fastest
annual rate in nearly six years, suggesting deflation is
worsening and strangling the world's second-largest economy.
[]
Chinese trade data for February reflected further pullback
in global demand, with exports falling 26 percent compared with
a 18 percent slide in January. []
"China has finally and spectacularly succumbed to world
financial crisis on the export side, and it's difficult to see
why that would improve in the short term," said Paul Cavey,
economist with Macquarie Securities in Hong Kong.
The euro fell 0.4 percent to $1.2630 <EUR=>, though held
above a 3-
