Asia rallies after US interest rate cut

Following the US Federal Reserve’s decision to cut interest rates earlier this week, Asian stocks have rallied to a six-week high.

Hong Kong has similarly cut interest rates to a record low which has supplemented the impact of the American decision and has meant that both developers and lenders have shown gains.

The reduction showed to the world, and especially Asia, that the US is doing all it can in order to overcome the current global economic situation and that has help to support world markets by restoring some confidence.

In Tokyo, Mitsubishi Estate Co has realised a 10 percent gain following traders betting that Japan will further reduce borrowing costs this week.

The move though has also been interpreted as a sign that the situation has got worse and may be the last throw of the dice as there is now less room to manoeuvre.

The MSCI Asia Pacific Index has increased by 2.7 percent to 89.82 and is at its highest close for over a month since the US and Australia last took action regarding the economic crisis.

Similarly, Japan’s Nikkei 225 Stock Average gained 0.5 percent and with gains also seen in Hong Kong with the charge led by China’s second largest mobile phone company, China Unicom.

Story link: Asia rallies after US interest rate cut