Asian stock markets rally over rate cuts

Asian stock markets rally over rate cuts

HONG KONG (AFP): Stock markets across Asia staged a turbo- charged rally Friday after the U.S. Federal Reserve cut interest rates for the second time in two weeks to avert the specter of recession.

Regional bourses took the lead from Wall Street, where the surprise quarter-point cut in the federal funds rate and the discount rate had pushed the Dow Jones 4.1 percent higher overnight.

Hong Kong's Hang Seng index leapt 9.0 percent, Singapore's Straits Times index surged 9.3 percent, the Jakarta Composite shot up 10.7 percent, the Bangkok broad-based index zoomed 8.1 percent and the Manila index jumped 7.0 percent.

Tokyo's Nikkei gained 2.2 percent, Sydney's All-Ordinaries rose 2.1 percent, Seoul's KSE index ended 1.4 percent higher and Kuala Lumpur's KLSE composite moved up 0.8 percent.

A firm yen and stable regional currencies underpinned the strong gains amid hopes of a more benign interest-rate environment in the crisis-stricken region where a credit crunch has slowly begun to ease.

Asian officials welcomed the U.S. Federal Reserve's decision which came as a surprise because it was announced outside of its regularly scheduled policy meetings.

In Hong Kong, share prices soared to a five-month high Friday on expectations of a local interest rate cut after the United States cut rates, dealers said.

The key Hang Seng index gained 806.59 points to close at 9,777.01, breaching the 9,670.45-point level it touched on May 21,

In Tokyo, stocks closed 2.2 percent higher, buoyed by gains on Wall Street following the U.S. Federal Reserve Board's decision to cut interest rates, brokers said.

The Nikkei 225 index on the Tokyo stock exchange rose 285.17 points to close at 13,280.54. The Topix index of all issues in the first section on the Tokyo Stock Exchange rose 26.57 points at 1,006.68.

In Singapore, stocks shot up 9.3 percent as U.S. interest rate cut lifted hopes of a further rate reduction at home to help induce economic recovery and return of foreign funds to the bourse.

The benchmark Straits Times index closed at a five-month high, up 94.85 points to 1,119.60 but off its intraday high of 1,131.95 while the broader All-Singapore index rose 23.37 points to 328.69.

In Kuala Lumpur, Malaysian share prices closed 0.8 percent higher but ended off their highs as early buying by local funds ahead of the national budget announcement lost momentum.

The Kuala Lumpur Stock Exchange composite index rose 3.01 points to end at 396.26 off a high of 404.22. The lesser second board index gained 1.25 points, or 1.3 percent at 100.68.

In Sydney, Australian share prices rallied 2.1 percent on the back of an unexpected cut in U.S. interest rates and hopes of a similar easing here, brokers said.

The Australian Stock Exchange's key All Ordinaries index finished 52.1 points higher at 2,511.4.

In Bangkok, Thai share prices extended their gains, rocketing 8.1 percent in line with regional markets after the U.S. interest rate cuts overnight, analysts said.

The Stock Exchange of Thailand (SET) broad-based index gained 24.03 points to 319.22 points, while the select SET 50 gained 2.08 points to 23.22 points.

In Manila, Philippine share prices rose 7 percent due to the rate cut in the United States, analysts said.

Morris Laude of Triton Securities Corp. said the rise was because "the United States cut interest rates. That's a big part of it."

The Manila index closed up 94.58 points at 1,437.36 points.

In Seoul, South Korean share prices closed 1.4 percent higher with foreign investors extending their buying spree following the U.S. interest rate cut, dealers said.

The Korea Stock Exchange index closed up 5.27 points at 374.01, off a high of 385.03.

In Shanghai, the B shares, nominally reserved for foreign investors, soared 4.9 percent on news that the U.S. Federal Reserve cut interest rates by 25 basis points, analysts said.

The Shanghai Stock Exchange's B-share index gained 1.76 points to close at 37.66 points.

In Auckland, New Zealand stocks were up 1.6 percent on heavy turnover of NZ$163 million (US$85.6 million), powered by strong gains on Wall Street following the U.S. rate cut.

The NZSE-40 index rose 28.53 to 1793.83 with Telecom Corp. up 18 cents to NZ$7.74