Asian markets advance on US rate cut, Wall Street rally

March 19th, 2008 - 8:30 pm ICT by admin  

A file-photo of Sensex
Tokyo, March 19 (DPA) Asia-Pacific stock markets rallied Wednesday, spurred by a Wall Street surge and a big cut in interest rates by the US Federal Reserve. Japan’s Nikkei 225 Stock Average rose 296.28 points, or 2.47 percent, to close at 12,260.44.

The broader Topix index of all first-section issues was also up 32.67 points, or 2.81 percent, at 1,196.3.

The jumps in Tokyo were seen after trading Tuesday in the US saw the blue-chip Dow Jones Industrial Average soaring 3.51 percent, the broader Standard & Poor’s 500 Index 4.24 percent and the technology-heavy Nasdaq Composite Index 4.19 percent.

The gains came after the US central bank cut its benchmark interest rate and two leading investment firms posted earnings that assuaged fears about the US financial sector.

The Federal Reserve cut its benchmark interest rate by 0.75 points to 2.25 percent in the latest of a series of dramatic attempts to boost the sagging US economy and temper volatility in global financial markets.

The gains on Wall Street came in spite of concerns by many analysts that the Bush administration failed to grasp the deeply rooted problems brought on by unsustainable financial policies.

Speaking in the New Zealand capital Wellington Wednesday, Nobel Prize winning economist Joseph Stiglitz said the current financial crisis is the worst the world has seen since the Great Depression of the 1930s and the US Federal Reserve move to cut interest rates will not make much difference.

“It will have some impact - it will do a little bit to stem the blood - but it’s not addressing the fundamental problems underlying the collapse of the financial sector,” he told Radio New Zealand.

Stiglitz, who won the Nobel Prize in economics in 2001, is a former chief of the World Bank and chaired former US president Bill Clinton’s council of economic advisers. He is in New Zealand on a speaking tour.

He said the Federal Reserve’s move to cut its funds rate by three-quarters of a percentage point was “just trying to ease the economy down rather than try to address the underlying problems”.

Elsewhere in Asia, Hong Kong’s Hang Seng Index closed the day up 482.33 points, or 2.26 percent, at 21,866.94 after gaining more than 3 percent in early trading.

Singapore’s Straits Times Index rose 2.05 percent, or 58.15 points, at 2891.73

South Korea’s benchmark Kospi index soared 33.48 points, or 2.1 percent, to close at 1,622.23. The main index of the technology-heavy Kosdaq market rose 12.03 points to 612.13.

After days of trading in the red, India’s benchmark Sensex touched a high of 15,465, but lost over 400 points by the end of the day and closed below 15,000.

The broader 50-stock S&P CNX Nifty of the National Stock Exchange in New Delhi closed at 4,573, up 0.9 percent, or 40 points.

Australian stocks saw a second day of recovery in the financial services sector propelling stocks to a strong finish Wednesday.

The ASX200 index put on 185 points, or 3.6 percent, to close at 5,289.

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