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Asian Markets Close Mixed, Retreat from Earlier Rally

Asian markets retreated in late afternoon trading, closing mixed after rallying earlier in the session following the Federal Reserve's interest rate cut.

Japan ended higher and Australia was the stand-out market, gaining over 1 percent and setting a new record close.

Seoul stocks hit a record but ended flat, as automakers dropped on worries a soaring South Korean won would hurt their bottom line, while Woori Financial slid after a surprise drop in quarterly profit due to subprime exposure.

The U.S. rate cut and weak dollar, as well as data showing a steep fall in U.S. crude inventories, sent oil soaring to a fresh high of $96.21 a barrel, which in turn drove spot gold to a new 28-year peak near $800 an ounce.

Investors were further encouraged by upbeat U.S. data showing the U.S. economy expanded by 3.9 percent in the third quarter, its fastest rate since the beginning of 2006, while another report showed private employers added workers this month at the greatest rate since June.

Gains for stocks were seen across the board generally but commodity stocks stood out following the rally in oil and gold. Gold producer Newcrest Mining, oil and gas producer Woodside Petroleum, mining giant BHP Billiton and China's Sinopec.

The region's major exporters were also buoyed by hopes the rate cut will help spur U.S. consumers, which drives about two-thirds of the world's biggest economy. LG Electronics, Canon and Sony all climbed, with Japanese exporters further boosted by the weak yen.

The Nikkei 225 Average posted its highest close in two weeks as the Fed's interest rate cut, surprisingly brisk U.S. economic growth data and a softer yen boosted exporters including Canon. Nippon Oil and other energy-related issues also fueled the market's rise after oil surged over $96 for the first time on an unexpectedly sharp fall in U.S. crude stocks.

Australian shares rose 1.1 percent to a record finish, as surging oil prices lifted resource firms such as BHP Billiton, while Westpac Banking gained on forecast-beating results.

Hong Kong blue chips jumped over 1 percent in a cross-the-board rally after the U.S. rate cut, with oil issues leading the way after crude prices hit new highs. Chinese refiner Sinopec shot up after China unexpectedly raised domestic gasoline and diesel prices by a tenth, the first increase in 17 months.

Singapore's Straits Times Index closed slightly lower. Shares of Neptune Orient Lines rose almost 5 percent after the firm posted a 50 percent gain in third-quarter net profit.

After a four-day rebound, Chinese stocks fell because of concern about tightening economic policy and the upcoming launch of stock index futures. The market started falling when the yield at a three-year bill auction by the central bank jumped 20 basis points, after the one-year bill yield surged at Tuesday's sale. Many money market traders interpret the rises as a sign that an official interest rate hike is imminent, or at least that the central bank is stepping up efforts to drain funds from the markets.