Wednesday's quarter-point rate cut by the U.S. Federal Reserve played second fiddle to regional issues in Asian trading today, with markets ending mixed.The lackluster close in Asian indices vs. Wall Street's big gains breaks a recent trend in which Asia has been closely tracking the U.S. markets. The Hang Seng rose 140 points, or 0.45% to 31,492.88, while in China the Shanghai Composite Index dropped 40 points, or 0.68%, to 5,914 points after Beijing increased the retail price of fuel by 10%. The yuan continued to stay strong vs. the dollar, at 7.4552 yuan. "Most of Asia is tightening through currency appreciation despite the fact that the Fed is cutting," says Silvia Liu, economist at Merrill Lynch in Hong Kong. "Inflation is picking up and growth remains incredibly strong." In China, Beijing controls the price of fuel. Today's surprise increase, which is the first in 17 months, was a response to refiners' decreasing margins to due to high fuel prices. The move comes despite previous statements by the Chinese government that they would remain pat on any price hikes, and many investors now expect an imminent rise in interest rates to counter inflation. Beijing usually raises interest rates on the weekend. "The government had previously said the fuel price will remain stable because of inflationary problems that higher fuel would exacerbate, but refiners losses have racked up and the government has altered course," says Adrian Foster, head of capital markets for Dresdner Kleinwort in Beijing.