Asian markets gain

Source: Stock Market Digital

Date :19/09/2007 08:54:43

Asian markets rose sharply yesterday following the rate cut made on Tuesday by the US Federal Reserve.

The overnight cut in the Federal Reserves interest rate by half a percentage from 5.25 percent to 4.75 percent sent US shares up sharply.

Analysts had predicted a cut in order to prevent housing market downturn however the size of the cut was twice as what most expected.

Market gain

The rise from 2 percent to 4 percent marks the biggest gains in a month by Asian markets.

Japan's Nikkei index added 3.4 percent in late afternoon trading while Hong Kong's Hang Seng index rose 3.8 percent.

Those who benefited from the cut included financials such as Mizuho Financial Group and exporters such as Toyota Motor Corp. adding to the rise in Japan.

In Hong Kong, property stocks such as Sun Hung Kai Properties pushed shares to a record high.

Analysts were hopeful on the outlook for Hong Kong, where they expect reduced borrowing costs to boost gains in asset prices and strengthen consumer spending.

Export market

Japanese investors carefully watch the US economy because it is Japan's biggest export market.

Concerns that recent woes in the US mortgage market may hit US economic growth have depressed Japanese share prices.

US shares had also performed well after the cut.

September 19 2007