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Asian stocks recover, reassured (for now) by the Fed
Hong Kong + 3.27; Shanghai + 1, 28; Tokyo + 1.15; Seoul +1.04. All the result of the promises of the Fed to keep interest rates (0 -0.25) low and find new "appropriate policies" (new stimulus packages?). But the path to long term recovery seems to be "difficult and rocky."
Hong Kong (AsiaNews) - All Asian stock markets rose this morning, after the yesterday’s announcement by the Federal Reserve (Fed) that it will keep interest rates low for at least two years. At midday the Hong Kong Stock Exchange had risen to 3.27, Shanghai 1.28; one of Tokyo 1.15; Seoul 1.04.
Analysts and markets seem reassured by the promises of Ben Bernanke, head of the Fed to keep borrowing costs low (between 0 and 0.25). The Committee of the U.S. central bank has not - for now – indicated a new stimulus package, similar to that of 600 billion dollars (QE2), which ended last June, instead said it was preparing "appropriate policies ".
But the announcement of lower interest rates was enough to raise markets. Yesterday, Wall Street, towards the end of the day, had its best performance in two years, rising 3.98% and the Nasdaq jumped 5.29%. It has also helped European stock exchanges to resume positive growth after the thud of the previous day.
Robin Bew, of the Economist Intelligence Group, commented to the BBC: "The immediate nervousness triggered by the downgrade...that is dissipating. But long-term worry, that the US and Europe have some serious issues and really don't seem to have a policy answer to them, still remains".
"Market sentiment hasn't stabilised yet - says analyst Toshiyuki Kanayama -, so while we'll likely see a relief rally today, it'll be a rocky path to recovery "