Trading across the region was still cautious, with volumes relatively low and the markets paring their early gains on anxiety about company earnings. Crude oil prices climbed to near US$39 a barrel after steep declines in recent days, and the dollar edged higher against the yen.

Mr Bernanke said on Tuesday the roughly $800 billion (S$1.2 billion) recovery package planned by the incoming Obama administration 'could provide a significant boost to economic activity' as the US struggles against a sharp slowdown in consumer spending and industrial production.

The Fed chairman also suggested banks and other companies may need more capital injections to stabilise the battered financial system.

'The comments from Bernanke ... are overall favourable for the financial system in the US,' said Mr Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong. 'This is modestly positive, and given that the market was oversold, even small favourable news can trigger at least a temporary rebound.'

Tokyo's Nikkei 225 stock average, which fell nearly 5 per cent on Tuesday, gained 24.54 points, or 0.3 per cent, to 8,438.45, and Hong Kong's Hang Seng Index added 36.56 points, or 0.3 per cent, to 13,704.61 after a six-day losing streak, but finished well of its highs.

Elsewhere, Shanghai's main index climbed 3.5 per cent, India's Sensex added 3.1 per cent and South Korea's Kospi rose 1.3 per cent.

Markets in Singapore and Australia advanced as well.

As European trading opened, Britain's FTSE 100 lost 1.1 per cent, France's CAC-40 shed 0.7 per cent and Germany's DAX fell 0.7 per cent.

Overnight in the US, Wall Street finished largely mixed amid growing angst about corporate profits. The Dow closed down 25.41, or 0.3 per cent, at 8,448.56, while the Standard & Poor's 500 index rose 1.53, or 0.2 per cent, to 871.79.

US futures were mixed, pointing to a lacklustre open on Wall Street on Wednesday. Dow futures rose 10 points, or 0.1 per cent, to 8,418 while S&P500 futures fell 1 point, or 0.1 per cent, to 867.60.

Japan's mega exporters were mostly higher as the yen weakened, with Sony rebounding 4.5 per cent and Canon Inc gaining 1.4 per cent.

In Hong Kong trade, Bank of China added 2.7 per cent after Royal Bank of Scotland sold its entire stake in the mainland's No. 3 lender for nearly US$2.37 billion, removing some uncertainty about investments in the Chinese company.

But HSBC weighed on Hong Kong's market after Morgan Stanley analysts said the heavyweight London-based lender may have to raise US$30 billion. The company's shares fell 4 per cent.

Rising oil prices lifted Asian energy producers such as major Chinese offshore firm CNOOC Ltd, up 4.1 per cent in Hong Kong trade, and Australia's Woodside Petroleum Ltd, which gained 2.5 per cent.

In the oil market, light, sweet crude for February delivery added US$1.56 to US$39.34 a barrel by midafternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract rose overnight 19 cents to settle at US$37.78.

The dollar strengthened to 89.47 yen, up from 89.48 yen, and the euro advanced to US$1.3240 compared to US$1.3103. -- AP

TOKYO
Japanese share prices ended 0.29 per cent higher on Wednesday, lifted by bargain hunting after the previous day's sharp fall, dealers said.

The benchmark Nikkei-225 index gained 24.54 points to 8,438.45, a day after plunging 4.79 per cent. The broader Topix index of all first-section shares climbed 5.27 points, or 0.65 per cent, to 819.39. .

HONG KONG
Hong Kong share prices closed 0.3 per cent higher on Wednesday, following mild bargain hunting after days of losses, dealers said.

The benchmark Hang Seng Index closed up 36.56 points at 13,704.61. Turnover was HK$66.23 billion(S$98.46 billion).

SHANGHAI
Chinese shares closed up 3.52 per cent on Wednesday as bank shares rallied after a larger-than-expected value of banking loans was issued in December, dealers said.

The benchmark Shanghai Composite Index, which covers A and B shares, closed up 65.50 points at 1,928.87 on turnover of 64.2 billion yuan (S$13.95 billion).

The Shanghai A-share index rose 68.80 points, or 3.52 per cent, to 2,025.08 on turnover of 64.0 billion yuan, while the Shenzhen A-share index gained 23.63 points, or 3.93 per cent, to 624.56 on turnover of 32.9 billion yuan.

KUALA LUMPUR
Share prices on Bursa Malaysia ended mixed today amid sustained buying interest in selective heavyweights, said dealers.

The Kuala Lumpur Composite Index (KLCI) was down 0.24 points to close at 913.46, dragged down by losses mostly in Bumiputra-Commerce. It opened 2.01 points higher at 915.71.

The Industrial Index went up 2.59 points to 2,128.27, the Finance Index declined 48.16 points to 7,244.73 while the Plantation Index dropped 5.42 points to 4,422.91.

The FBMEmas added 0.63 points to 5,986.92, the FBM30 decreased 11.77 points to 5,885.13, the FBMMesdaq fell 9.69 points to 3,307.77 and the FBM2BRD moved up 25.98 points to 4,013.38.

Gainers led losers by 239 to 228 while 214 counters were unchanged, 570 untraded and 29 others suspended.

Volume narrowed to 453.953 million shares worth RM653.787 million compared to yesterday's close of 515.745 million shares valued at RM760.196 million (S$316.5 million). -- AFP, BERNAMA, AP