China Eastern Airlines and China Southern Airlines both rallied in trading on Thursday as their parents received government aid to help the carriers struggling in the global downturn.

China Eastern shares jumped 41.3 per cent to HK1.06 to the highest since October 22 in Hong Kong, and gained 9.9 per cent to Rmb4.32 in Shanghai, while China Southern gained 43 per cent to HK$1,33 in Hong Kong and 9.9 per cent to Rmb3.66 in Shanghai.

However, the gains in Shanghai weren’t enough to buoy the wider Shanghai Composite Index, which closed down 2.3 per cent at 2,031.681, managing to stay above the psychologically important 2,000 level for the sixth consecutive day.

Investors were absorbing government data published late on Wednesday showing that exports had unexpectedly dropped for the first time in nearly seven years. There were also few surprises out of the much anticipated annual economic work conference in China, where economic aims are usually set for the year, analysts said.

Separate data from China showed that consumer price increases slowed to 2.4 per cent year on year in November, compared with 4 per cent in October.

Financial shares weighed the index down, with Citic Securities falling 4.3 per cent to Rmb21.76, Minsheng Bank dropping 3.9 per cent to Rmb4.44 and Shanghai Pudong Development Bank rising 3.7 per cent to Rmb14.86.

The Hang Seng edged 0.2 per cent at 15,613.90 and the sub index of mainland Chinese shares edged 0.3 per cent lower to 8,486.45.

In Seoul, shares gained 0.8 per cent to 1,154.43, the highest in more than a month, after the central bank cut interest rates a full percentage point to a low of 3 per cent in efforts to stave off a recession.

“The message was clear in that the BoK sees GDP growth slowing and will do what it can to support the economy,” Deutsche Securities analysts said in a report. “We expect the economy to suffer its first recession since the Asia financial crisis driven by weak exports. Domestic demand risks are to the downside as both Korean households and SMEs remain heavily leveraged.”

“To reduce the risk of a severe recession, the BoK is acting preemptively, as reflected in the 100bps rate cut today,” the analysts wrote. “However, we think rate cuts alone are insufficient to bring down market/lending rates sufficiently due to dislocations in financial markets.”

Hyundai Heavy, LG Electronics and Samsung Electronics led the Kospi higher, while banks fell. Hyundai Heavy gained 4.5 per cent to Won209,500, LG Electronics gained 4.7 per cent to Won84,800 and Samsung Electronics gained 0.3 per cent to Won482,500.

Kepco’s shares were trading 4.8 per cent higher before closing down 0.2 per cent at Won31,500 after a local report said the power company was planning on slashing its workforce by more than 10 per cent.

Hynix Semiconductor’s shares continued to decline even though there are expectations that its main shareholders will provide it with financing. Shares were closed down 11.7 per cent at Won6,520.

Elsewhere in the region, Elpida Memory lost 8.9 per cent to Y420, the 20th session it has closed lower than Y509, the trigger price for a type of convertible bond it had issued. This means it is highly likely that the company will have to redeem the bonds, using much needed investment cash. However, should the bonds have been converted into equity, it would have significantly diluted existing shares.

The Nikkei 225 gained 0.7 per cent to 8,720.55, while the broader Topix rose 1.8 per cent to 849.25.

Sumitomo Mitsui Financial Group gained 9.6 per cent to Y342,000 after it said it will increase the amount it plans to raise through preferred securities to about $5.8bn from about $4.3bn earlier.

In Australia, shares lost 1.2 per cent to 3,598.0.

ING Industrial Fund slumped by half its value to A$0.20 after earlier losing as much as three quarters of its value. The property fund said it was reducing distribution and that new agreements with banks regarding its margins, charges and altered foreign exchange strategy would reduce its earnings.

Rio Tinto gained 7 per cent to A$40.00, extending Wednesday’s gains of 12.1 per cent. The company said late on Wednesday that it was planning on slashing jobs and debt.

The Sensex was trading 1.7 per cent lower at 9,495.60.