The rise marked the Hang Seng's biggest one day points rise ever, a day after the index saw its biggest-ever points fall.
Analysts said the US cut in interest rates by three-quarters of a percentage point had helped restore confidence and prompted a round of bargain hunting among investors.
Adding to the bullish mood was a decision by the Hong Kong financial authority to also cut interest rates, making mortgage loans cheaper for home buyers and helping to lift property stocks.
In Japan stocks also saw a significant boost from the US rate cut at the start of Wednesday's session, slowing somewhat in later trade but still ending the day up 2.04 per cent.
Until close of trade on Tuesday the Nikkei had dropped 18 per cent since the beginning of the year.
But many traders believe that the Fed's latest rate cut alone may not be enough to prevent the US from falling into recession.
"We consider the Fed's rate cut still insufficient for the global financial markets to completely recover and help the Japanese stocks to fully rebound,'' Shinichi Ichikawa, chief strategist at Credit Suisse, said in a statement.
In mainland China markets saw a volatile day, with the benchmark Shanghai Composite Index initially rebounding as nervous investors booked profits, then dipping to a five-month low before ending the day up 3.1 per cent.
Shanghai-listed shares in Bank of China fell at one point by 8 per cent before ending the day down 2.9 per cent.
The fall came despite gains in its Hong Kong-listed shares after China's second largest bank issued a statement overnight on Tuesday rejecting reports it could report an overall loss for 2007 as a result of writedowns on US sub-prime mortgage securities.
Indian shares also opened Wednesday's session higher, with Mumbai's benchmark Sensex index up 4.6 per cent by midday.
A day earlier the index slid by almost 10 per cent shortly after the market opened, triggering an automatic one hour halt to trading.
|Shares in Shanghai ended the day |
up after a turbulent session [AFP]
Overall Indian markets have fallen more than 19 per cent in the previous seven trading sessions on fears that the US economy, a key market for Indian exports and outsourcing contracts, will shrink this year.
Tuesday's US rate cut - its biggest in more than 23 years - lifted markets in the US, Europe and Latin America, after stocks had plummeted around the world over fears of a US recession.
"The committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth," the Federal Reserve said.
US stock markets rallied in response, with the Dow Jones closing Tuesday's session down by just over 1 per cent after starting the day almost 5 per cent down.
Reporting from New York Al Jazeera correspondent John Terrett said the Federal Reserve's move was to send a message that the leadership of the US economy was prepared to pull out all the stops to prevent a recession.