Asian Stock Markets Follow Wall Street Rebound after Fed Pledge

Finance | August 10, 2011, Wednesday // 09:20|  views

After Monday's slumps in Tokyo, pictured here, the Nikkei 225 index picked up in morning trading. Photo from the Daily Mail/UPI

Asian stock markets have rebounded Wednesday after the US Federal Reserve said Tuesday it will keep interest rates on hold.

The decision by the US central bank (announced Tuesday afternoon Eastern Time) to keep rates at current levels until at least 2013 led to the best day in two years on Wall Street.

On Wednesday, Japan's Nikkei 225 index and South Korea's Kospi rose 1% while Hong Kong's Hang Seng gained 3.6%, the BBC reported.

Australia's ASX index added 120.69 points to 4,155.5, after erasing loses of almost 6% on Tuesday. New Zealand's main NZX 50 index added 3.5% to 3,206.2.

Shanghai's Composite Index opened 1.4% at 2,562.4. In India, the Sensex gained 2%.

The gains came after markets in Europe and the US gained on Tuesday. The UK's FTSE 100 index ended up 1.9%, while France's Cac added 1.6%. The main US share index, the Dow Jones, closed up 4%.

The jump in stocks also triggered a recovery in the oil markets. Crude oil prices rose almost 3% in Asian trade reversing a slump from previous sessions.

In spite of the rebound, however, analysts have pointed out many investors are bound to remin concerned, and the global markets will stay plagued with fears about the global economy since the Fed was expected to put forth more tangible measures to boost expansion, such as an economic stimulus package.

One of the key reasons behind the massive sell-off over the past few days has been the fear that the US, the world's biggest economy may be falling into recession.

In tandem with its rates decision on Tuesday, the Fed also warned that US growth this year had been "considerably slower" than it had expected.

The fears about the state of the global economy were fanned last week by Standard & Poor's decision to cut the US's credit rating from triple A to AA+ for the first time.

On top of this, the ongoing debt issues in Europe have prompted many analysts to revisit their own estimates for both economic and corporate profit growth, the BBC has stressed.

Despite the concerns, trading on Wednesday provided markets with a respite from the recent selling spree.

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Tags: debt crisis, Spain, Italy, euro zone, interest rates, Federal Reserve, USA, US, Fed, VIX, NASDAQ, dow jones, Federal Reserve, stocks, US, gold, economy, wall street


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