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Economic Uncertainty Weighs on Asia Markets

Stocks in Asia were mixed Thursday as concerns over the global economy once again took center stage, while renewed uncertainty about the U.S. auto bailout plan sparked a subtle shift towards assets seen safer such as the yen.

South Korea's central bank cut interest rates by one percentage point, becoming the latest central bank to respond aggressively to a sharply slowing economy and falling inflation. Data out of China on Wednesday showed unexpected weakness in exports and internal demandin November, sparking a fresh commitment from the government to take steps to reinvigorate the economy.

The U.S. dollar fell against the yen, while oil futuresgained some ground, trading just below $44 a barrel in the Asian session.

Japan's Nikkei 225 Averageclosed 0.7 percent as hopes that economic proposals could limit the depth of a global recession won out over a stronger yen and worry whether the U.S. auto bailout will be passed by the Senate. Honda Motor soared after the U.S. House of Representatives approved bailout legislation that would shore up Detroit's Big Three for now, but KDDI Corp and other domestic demand shares were sold on profit-taking after strong recent gains.

Seoul shares ended firmer, up 0.75 percent, helped by a bigger-than-expected central bank interest rate cut sending financials and shipbuilders higher, but a loss in Hynix Semiconductor on persistent funding worries weighed.

Australian shares fell 1.2 percent as financials and property stocks struggled, though a late rally for energy firm Santos after it exited a troublesome venture in Indonesia offered support.

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Hong Kong shares gained 0.2 percent, cooling off after rallying 15 percent in a week, but Chinese energy companies surged on talk of an increase in the country's crude reserves while airlines soared on capital-raising plans. But China Southern Airlines soared 47 percent at one point while smaller rival China Eastern Airlines shot up 48 percent after announcing plans to place shares worth 3 billion yuan ($438 million) each as part of the government's capital injection plan for the ailing sector. Both stocks were suspended from trade last month pending capital-raising announcements.

Singapore's Straits Times Index was 1.5 percent lower. But shares of Singapore Petroleum gained 3.3 percent after crude oil futures rose 3 percent on Wednesday.

Chinese stocks fell 2.3 percent, led by banks and steel, after a meeting of top economic planners ended without a hoped-for announcement of fresh stimulus steps. Steel shares continued sliding on concern that deflation early next year, following this week's lower-than-expected inflation data, would drag down their product prices. Wuhan Steel sank 3 percent after losing 2.7 percent on Wednesday.