Asian shares rally, reassured by Turkish rate hike SYDNEY (Reuters) - Asian markets rallied on Wednesday after Turkey stunned investors with a huge hike in interest rates, stirring hopes the drastic action would short-circuit a vicious cycle of selling in emerging markets and revive risk appetite generally. The bold move even managed to overshadow the U.S. Federal Reserve's meeting at which it is widely expected to trim its asset buying program by another $10 billion a month. <TOP/CEN> S&P 500 e-mini futures climbed 0.5 percent and Japan's Nikkei .N225 jumped 1.7 percent as safe havens such as the yen and gold all eased. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS bounced 0.5 percent after three sessions of falls. Turkey followed India by tightening policy at a midnight meeting of its central bank, with a huge hike of 425 basis points taking the overnight lending rate all the way to 12 percent. "Desperate times call for desperate measures, this is a confidence-saving measure," said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York. It will definitely hurt but it might be enough to stem the bleeding. It looks like the lira acted positively, whether it lasts is anyone's question. Early signs were that it might be enough to stem the rout in the Turkish lira which surged to 2.1870 per dollar, and away from Monday's historic low of 2.39. Turnover was very high for Asian hours, where the currency is rarely traded. More emerging market central banks are expected to take steps to quell a mix of inflationary pressures at home and a flight of capital abroad. South Africa's central bank holds its policy meeting on Wednesday. Just the prospect of action had helped stabilize stock markets across the globe after several days of hectic selling. The MSCI emerging equity index .MSCIEF edged up 0.4 percent from a 4-1/2 month low. On Wall Street, the Dow .DJI ended Tuesday with gains of 0.57 percent, while the S&P 500 .SPX rose 0.61 percent. The calmer tone was reflected in the market's favored measure of volatility, the VIX index, which .VIX dropped over 9.0 percent on Tuesday to 15.80 and off a peak of 18.99. Currencies leveraged to commodity prices and global economic growth benefited from the better mood. Also helping was surprising strength in industrial production in South Korea, an antidote to recent softness in Chinese data. The Australian dollar rose a third of a U.S. cent to $0.8800 in the wake of the news from Turkey. The Aussie is often used as a proxy for hedging against stress in less liquid emerging markets. Currencies from South Korea to Indonesia and Malaysia all started firmer. Going the other way, the safe-haven yen gave up some of its recent gains as the dollar advanced to 103.25 yen from a seven-week trough of 101.71 touched at the start of the week. Emerging markets could still be vulnerable to whatever the Fed decides on policy. The reduction of U.S. stimulus, combined with the resulting higher bond yields, is one reason funds have been switching money back to the developed world. Yet many investors seem to have made peace with a steady pullback in asset-buying given it is balanced with a commitment to keeping rates near zero for a long time to come. Benchmark 10-year Treasury yields, for instance, have steadied at 2.77 percent compared to a peak of 3.04 percent at the start of the month. In commodity markets, gold lapsed to $1,252.70 an ounce to be well off Monday's high of $1,278.01. U.S. crude edged back 29 cents to $97.12 having hit its highest so far this year on expectations that supplies were dwindling at the contract's benchmark delivery point. Brent crude had added 76 cents to $107.45 a barrel on Tuesday. Reporting by Wayne Cole; Editing by Eric Meijer