TOKYO, Jan. 23--Most Asian markets rebounded Wednesday, reversing their recent gut-wrenching plunge as investors welcomed a hefty, surprise interest rate cut overnight by the US Federal Reserve to shore up the sagging American economy.
But analysts said volatile swings were expected to linger for some time because the Fed’s quick action, at an emergency meeting, was seen by some as a sign American authorities view the US credit crunch as a very serious problem, AP wrote.
“The Fed’s action provided a very positive surprise,“ said Tsuyoshi Segawa, strategist at Shinko Securities Co. in Tokyo. “But people are also starting to think that things may be so bad they needed to act.“
In a rare policy move outside of its ordinary meetings, the Federal Reserve slashed interest rates by 75 basis points to 3.5 percent on Tuesday, its biggest cut in more than 23 years and a move that some traders said smelled of panic, Reuters reported.
As the day progressed, many Asian markets trimmed their initial, robust gains, and some even dropped into negative territory.
Japan’s Nikkei 225 index was up 1.7 percent in afternoon trading after jumping 3.4 percent earlier, recouping some of its 9.3 percent loss the last two days. Australia’s benchmark index rebounded 4.4 percent, snapping a 12-day losing streak.
In Hong Kong, the Hang Seng index--which had plummeted 13.6 percent the last two days--surged 7.5 percent at the opening before trimming gains to be up 5.3 percent by midday.
India’s Sensex index jumped 4.6 percent at the opening before slipping back slightly.
Stocks in Singapore and Thailand, meanwhile, were down modestly.
Meanwhile, oil retreated below $89 on Wednesday after making a nervous recovery as an emergency US interest rate cut halted a global financial market sell-off but failed to halt recession fears in the world’s top oil consumer.
US crude fell 55 cents to $88.66 a barrel by 2:48 a.m. EST after falling as low as $86.11 a day ago amid a global stock market rout.
London Brent crude shed 45 cents to $88.00 a barrel, about $1 below its close on Friday before the worst of the turmoil hit global markets.
Some analysts said traders had been selling oil and other commodities to cover margin calls in other markets.

Asian construction workers at a project in Dubai, UAE.

Persian Gulf Arab states heavily dependent on an Asian labor force agreed on Tuesday with labor-sending Asian countries to join forces against the exploitation of expat workers from Asia.
Persian Gulf Cooperation Council (PGCC) labor ministers and counterparts from Asia are to propose an action plan to protect the welfare of Asian workers, according to their Abu Dhabi Declaration, AFP wrote.
The ministers have recommended the drawing up within three months of the plan aimed at “preventing illegal recruitment practices“ both at the country of origin and in host countries.
The declaration also called for “promoting welfare and protection measures for contractual workers ... and preventing their exploitation at origin and destination.“
Emirati Labor Minister Ali Al-Kaabi said at the start of the ministerial meeting on Tuesday that “guest workers must be afforded the security that they will receive the benefits that they are entitled to“.
The Abu Dhabi Labor Dialogue was the first of its kind to be held in a major labor-receiving country.
The meeting in the Emirati capital builds on the Asian Regional Consultative Process on Overseas Employment and Contractual Labor, known as the Colombo Process.
Set up in 2003, the Colombo Process groups Afghanistan, Bangladesh, China, India, Indonesia, Nepal, Pakistan, the Philippines, Sri Lanka, Thailand and Vietnam to initiate dialogue on overseas labor.
The six members of the PGCC have a total population of 35 million people, around 13 million of whom are expatriates, mostly foreign laborers from Asian countries.
“We have agreed that Asian workers are contracted workers, not what some call immigrant workers,“ Kaabi told reporters at the end of the ministerial meeting, stressing that those workers stay in the PGCC for a limited period.
“This would preserve the demographic nature of the countries of the region,“ said Yousuf Abdulghani, the labor ministry assistant undersecretary on Monday.
In October, Bahrain’s Labor Minister Majeed Al-Alawi called for a six-year residency cap on foreign workers. But a PGCC summit in December did not take up the proposal.
The booming economies of the PGCC countries, which are reaping the benefits of record oil prices, remain however in dire need of cheap skilled and unskilled labor from the Asian sub-continent.
But they are facing increased competition from other countries in need of skilled Asian labor, according to a senior Sri Lankan delegate.
“When it comes to salaries, there are other countries looking for the same categories of skills... If well trained, they (workers) would not come to the PGCC because of salaries,“ said Kingsley Ranwaka of the Sri Lanka Bureau of Foreign Employment.
Studies have suggested the gap between wages in the PGCC and some robust Asian economies is closing fast, dampening the appeal of the Persian Gulf market for skilled workers.
Meanwhile, PGCC countries frequently come under fire from human rights organizations to improve working and living conditions.
On Sunday, New York-based Human Right Watch urged the meeting in Abu Dhabi to adopt measures to halt “widespread violations“ of the rights of Asian expatriate workers.
Kaabi told the meeting on Tuesday that the United Arab Emirates, where thousands of Asian workers have gone on strikes over past months, has been working hard to improve conditions.
The UAE has “taken several (labor) protection measures... In the past two years, we have worked to improve the conditions of expatriate workers in fields including housing, health and wage protection,“ he said.
The next Abu Dhabi Dialogue Ministerial Consultation will be held in 2010, the declaration said without specifying a location.

A euro symbol is seen in front of the European Central Bank in Frankfurt, Germany.

FRANKFURT, Germany, Jan. 23--European Central Bank chief economist Juergen Stark said Tuesday that the ECB was closely monitoring relatively high eurozone inflation at present and how market players were adjusting to it.
In a radio interview with Deutschlandfunk, Stark noted that the ECB had a clear mandate to guarantee price stability in the region, AFP wrote.
“Currently we are concerned about the relatively high inflation rate of more than 3 percent, which will continue in the next months of this year,“ he said.
“We will monitor closely how this inflation rate develops and how market players respond to it and we will then act accordingly,“ he said.
Commenting on the economic situation in the 15-nation region, he said that the “fundamental data were good“.
“This means in concrete terms that the earnings situation in the corporate sector is, as before, favorable, and that private households in Germany and in the euro area are in a better position compared with those in other parts of the world, where private households are highly in debt,“ he added.
Stark said there was also a marked improvement in the labor market and that the jobless rate was expected to decline further.
As employment figures increased, private consumption would also contribute more strongly to economic growth, he added.
In another development, UK Central Bank Governor Mervyn King said in a speech on Tuesday that Britain is likely to face an acceleration of inflation and a slowing of growth in 2008.
Speaking at a dinner in Bristol, western England, King said, “To put it bluntly, this year we are probably facing a period of above target Inflation and a marked slowing in growth“.
He added that “the next year will pose economic challenges for all of us--more so than at any time since the Bank of England was given its independence in 1997“.
King’s comments came after the Bank of England confirmed that it had no plans to bring forward its February interest rate meeting, after the US Federal Reserve sprang a shock rate cut.
The BoE, whose next monetary policy meeting is on Feb. 6-7, had frozen British borrowing costs at 5.50 percent earlier this month.

SEATTLE, USA, Jan. 23--Dell Inc and Microsoft Corp are teaming up to release a Product Red computer and will donate up to $80 for every PC sold to buy and distribute AIDS-fighting drugs in Africa.
Dell will start selling three (Red) computer models--two laptops and one desktop--running Microsoft Windows Vista on Jan. 31. Depending on the model, the two companies will donate $50 or $80 to the Global Fund, which finances health programs in Africa.
Red, founded by U2 singer Bono and Bobby Shriver, works to develop co-branded products with companies such as Motorola Inc, Apple Inc (AAPL.O) and Gap Inc, which then donate a portion of the proceeds for antiretroviral drugs.
Microsoft said it expects “several hundred thousands“ of (Red) Dell PCs to be sold in 2008. The PCs, designed in part by Bono, will be wrapped in a distinctive red casing and the Windows interface will feature a red background and sidebar. “My job is to put some poetry in the machine, put some funk in the machines,“ Bono said in an interview with Reuters.
Red has raised $53 million for the Global Fund since its founding in 2006. Bono, who expects to exceed that figure in 2008 alone, said the organization lost some potential partners after a critical article in Advertising Age questioned the effectiveness of the campaign.
Microsoft Chairman Bill Gates, who provided some of the seed money for Red, defended the group, saying it has saved lives that would have otherwise been lost.
“I guess you can criticize even life-saving activities. I don’t know how, but if somebody has a better idea than Red to save more lives, we are all ears,“ said Gates in an interview. “I put it in the category of a creative use of capitalism.“
The Dell products offered under the Red brand will be a XPS One desktop and XPS M1330 and M1530 laptop computers. The products will sell for the same price as the non-Red branded computers offered by Dell.

BEIJING, Jan. 23--China has established a task force to monitor the US subprime exposure held by domestic lenders as worries over the impact of the mortgage crisis intensifies, the Financial Times reported Wednesday.
The China Banking Regulatory Commission, the main industry watchdog, will send a team to examine the subprime holdings of China’s major banks and report on a monthly basis, the newspaper said.
A spokesman of the agency declined to comment on the report when contacted by AFP.
There have been mounting concerns in Beijing over the impact of US subprime default and subsequent credit crunch on the balance sheets of Chinese banks.
Analysts have said Bank of China, believed to have the largest subprime exposure among Asian financial institutions, would set aside larger than expected provisions for subprime losses.
But the bank dismissed worries over its bottom line.
“The bank’s after-tax profit continued to grow in 2007,“ the bank said in a statement with the Shanghai Stock Exchange late Tuesday.

NEW DELHI, India, Jan. 23--India’s economy may lose a bit of steam in coming months but will remain on track for strong growth despite global market turmoil and mounting fears of a US recession, analysts say.
The Asian giant’s expansion will remain far above anemic growth in the West thanks to high savings and investment rates and strong domestic demand driven by its 1.1-billion-strong population, AFP quoted experts as saying.
“The economy has sufficient internal ballast so it won’t be blown off course--but it will lose some momentum,“ said Goldman Sachs economist Tushar Poddar.
While the World Bank forecasts average global growth for this year at a high of 3.3 percent, an Indian government advisory panel last week predicted 8.9 percent growth for this financial year to March 2008, slowing to 8.5 percent the following year.
Last year, India’s economy grew by 9.4 percent, second only to China’s scorching expansion for 2007 forecast at around 11.7 percent.
“The structural growth story remains intact and opportunities to invest in one of the more dynamic economies will remain plentiful,“ said Poddar.
Abheek Barua, the chief economist at India’s HDFC Bank, agreed, telling AFP, “There’s underlying traction in the Indian economy.“
Despite overall confidence in India’s economic prospects, nerves have been frayed this week by the turmoil on global stock markets.
Mumbai’s benchmark 30-share Sensex index, which soared a record 47 percent last year as foreign investors were lured by India’s blistering economic growth, has fallen nearly 20 percent in the past seven trading sessions. But analysts said they expected the market to stabilize soon.
“Already some long-term funds are picking up front line stocks,“ said Amitabh Chakraborty, equities president at Mumbai’s Religare Securities.
“There’s no reason at all to allow the worries of the Western world to overwhelm us,“ Finance Minister P. Chidambaram said Tuesday, urging investors not to panic.

BELGRADE, Serbia, Jan. 23--Serbia said Tuesday it had agreed a multibillion dollar gas pipeline project as part of an energy deal with Russia that would boost Moscow’s control over supplies to Europe.
A majority stake of the Serbian oil monopoly NIS will be sold to Russian energy giant Gazprom and Russia would route part of the gas pipeline through Serbia, as part of the deal announced in a short statement by the Serbian government. Financial terms were not revealed, AP wrote.
Serbia endorsed the deal just days after Russian President Vladimir Putin won Bulgaria’s support for the South Stream pipeline project that further dashes the European Union’s hopes of reducing its growing energy reliance on Russia.
Russia promised to extend the pipeline into Serbia and build a huge gas storage facility there, to turn the Balkan nation into a major hub for Russian energy supplies to Europe. But the pipeline deal with Serbia apparently comes at a price. Some Serbian officials said that Russia’s initial offer of $600 million (400 million euros) for a 51 percent stake in NIS represented just one-fifth of its market value.
Russian energy giant Gazprom and Serbian officials have haggled over terms, triggering infighting in the Serbian Cabinet. It was not clear if Russia bettered the offer.
Belgrade has turned increasingly away from the West and toward Russia, which supports Serbia in the debate over independence for its Kosovo province.
Serbian Infrastructure Minister Velimir Ilic, who was authorized by the government to sign the deal with Russian government, said the accord was “strategic and the biggest investment in Serbia so far.“ “The accord will be signed on Jan. 25 in Moscow and this is the best news for Serbian businessmen and our citizens,“ Ilic told B92 radio.
The government coalition had previously delayed agreement on the deal due to reservations by ministers from the pro-reform Democratic Party of President Boris Tadic.
But ministers from the Democratic Party of Serbia of conservative Prime Minister Vojislav Kostunica, pushed strongly for the accord, arguing that it was crucial for Serbia’s economic development..