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HONG KONG, Sept 19: Asian stocks surged on Wednesday after the Federal Reserve slashed interest rates by a bold half point to try to shield the US economy from the housing and credit market woes.
The hefty dose of monetary medicine sparked an exuberant rally on Wall Street Tuesday on hopes that the first cut in the Fed’s benchmark rate in four years would limit the fallout from a credit squeeze and a housing market slump.
Asian and European stocks followed suit, posting sharp gains, but there were concerns about how long the rally would last given the steady trickle of bad news linked to problems in US subprime home loans to risky borrowers.
Tokyo surged almost 3.7 per cent with the biggest points gain in five and a half years as a decision by the Japanese central bank to refrain from hiking its own interest rates provided additional relief for the market.
Although many investors had been hoping for a half-point cut, there had been uncertainty about how the Fed would respond to recent credit market turmoil under chairman Ben Bernanke who took the helm of the central bank last year.
TOKYO: Japanese share prices soared by 3.7 per cent, posting their biggest points gain in more than five years as investors cheered a deep US interest rate cut.
Dealers said a decision by the Japanese central bank to refrain from hiking its own interest rates provided additional cheer for the market, although no change had been expected given economic and domestic political uncertainties.
The Nikkei-225 index rose 579.74 points to 16,381.54. Turnover increased to 1.8 billion shares from 1.6 billion shares on Tuesday.
Shares soared in the wake of a powerful rally overnight on Wall Street where shares closed sharply higher Tuesday on hopes that the first cut in the Fed’s benchmark rate in four years would ease tight credit and a housing slump.
HONG KONG: Share prices closed at a record high in heavy trade, up 3.98 per cent, after the US cut its key rate by a larger-than-expected 50 basis points, triggering a liquidity-driven rally across the region.
Dealers said the performance marks the biggest one-day points gain for the index since August 20, when it rose 1,208 points after China announced that it will allow mainland individuals to directly buy stocks in Hong Kong.
The Hang Seng Index closed up 977.79 points at 25,554.64. Turnover also touched a all-time high at 138.73 billion Hong Kong dollars (17.8 billion US).
MUMBAI: Indian share prices surged 4.17 per cent to a record close as investors hoped the central bank would follow a US Federal Reserve rate cut.
Dealers said domestic and foreign funds snapped up blue chip shares in listed in the 30-company Mumbai stock exchange Sensex index. The Sensex rose 653.63 points to close at 16,322.75.
Banking, property, and metal stocks rose after the US Fed cut a key rate by half a per centage point to 4.75 per cent on Tuesday and sparked hopes for lower rates in India.—AFP
