Equities gain on Fed announcement

Global equities markets were higher on Tuesday as the Federal Reserve announced in the United States that it will lend up to $200 billion in Treasuries to banks in exchange for mortgage-backed securities. In addition Canadian and European Central Banks will inject up to $40 billion into their banking systems. The hope is that these moves will increase lending and help the US economy avoid a recession.

In the Asia-Pacific region, the only major declines came in Australia, where the S&P/ASX200 dropped 0.89 percent to 5,134.2 and the Sydney Ordinaries fell 1.22 percent to 5,211.1 after the mining sector declined on drops in metals prices. Elsewhere most markets saw moderate gains. The Shanghai Composite was 0.47 percent higher to 4,165.88 while the Straits Times Index was up 0.86 percent to 2,860.85. Taiwan’s Taiex added 0.99 percent to 8,381.6. The Kospi index gained 1 percent to 1,641.48, the Sensex added 1.25 percent to 16,123.15 and the Hang Seng was up 1.28 percent to 22,995.35.

Tokyo’s markets also saw gains. The Nikkei 225 was 1.01 percent higher to 12,658.28 while the Topix index added 0.88 percent to 1,235.15 and the Mothers market jumped 3.19 percent to 613.05. The steel sector saw gains, while automobile manufacturers and tire makers were higher. Banks also saw gains.

In Europe banks, insurers, builders, retailers, and the pharmaceuticals sector all saw gains, while carmakers, the semiconductors sector, airlines, utilities, and the aerospace sector declined. The FTSE Eurofirst 300 added 1.28 percent to 1,270.81. The Dax was up 1.19 percent to 6,524.57 in Frankfurt while the Paris CAC-40 was 1.33 percent higher to 4,627.69 and Madrid’s IBEX jumped 3.17 percent to 13,056.1.

London’s markets were also higher, with the FTSE 100 up 1.09 percent to 5,690.4 and the FTSE 250 gaining 1.06 percent to 9,772.8. Banks, insurers, and the oil sector were all higher. The mining sector was mixed, while the media sector saw more declines than advances.

Wall Street was higher in midafternoon trade. The Dow Jones Industrial Average was up 2.27 percent to 12,007.42. The Nasdaq also gained 2.27 percent, to 2,218.69, while the S&P 500 added 1,300.67. Mortgage lenders and homebuilders saw gains after the Fed’s announcement on lending to lenders. Banks were mixed, with most higher and some of those with losses seeing their declines fade as the afternoon progressed. The oil sector was up on record prices for crude oil. The semiconductors sector saw gains on sales that were up 29 percent in February for chips made in Taiwan. One US chipmaker, however, saw declines after it reduced its forecast for its fourth quarter and on a broker downgrade.

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