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Asian Markets Mixed After Worldwide Interest Rate Cuts

Trading on Asian markets is mixed Thursday, following a move by the world's central banks to cut their key interest rates in a coordinated attempt to head off a global recession.

Japan's benchmark Nikkei index closed .50 percent lower, and markets in Manila, Sydney, Taiwan and Wellington also lost points at the end of their sessions.

But the Hang Seng in Hong Kong closed the day's trading with a gain of more than three percent, as investors reacted to news the territory's central bank was cutting its key interest rate by 1.5 percent. Seoul's index is also trading higher after the Bank of Korea slashed its key interest rate a quarter of one percent.

In early morning trading, Europe's main indexes - London, Paris and Frankfurt - were all up more than two percent.

The U.S., European, British, Canadian, Swiss, Swedish and Chinese central banks all cut their key rates on Wednesday.

They took the action as the International Monetary Fund warned that the world economy is entering a "major downturn," and faces the "most dangerous" shock in mature financial markets since the 1930's.

Officials elsewhere hope that lowering interest rates will help persuade banks to resume lending money, and ease a credit crunch that makes it difficult for many businesses to operate.

Japan's central bank has kept its key rate steady, opting instead to inject billions of dollars into the money markets. The bank poured $20 billion into the system today, one day after the Nikkei suffered its biggest loss in two decades.

The European Central Bank also says it will pump $100 billion into the markets to keep them solvent.

Meanwhile, Iceland's financial regulator announced earlier today it will take control of Kaupthing, the country's biggest bank, in a move it says will safeguard the domestic banking system.

This is the third takeover of Iceland's biggest banks by the government this week, following the seizures of Landsbanki and Glitnir.

In a separate development, the global financial crisis continues to have an effect on oil prices. Trading for light sweet crude for November delivery dropped to around $88 a barrel in Singapore, while Brent crude oil in London fell to around $83 a barrel.

Some information for this report was provided by AFP, AP and Reuters.