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| Global markets rally after US cut | Global markets rally after US cut |
| (10 minutes later) | |
| Global stock markets have risen after the US Federal Reserve's biggest interest rate cut for 25 years helped calm fears of a global economic slump. | Global stock markets have risen after the US Federal Reserve's biggest interest rate cut for 25 years helped calm fears of a global economic slump. |
| The UK FTSE 100 index opened 42 points or 0.8%, higher at 5,782. France's Cac added 1.3% and Germany's Dax rose 1.2%. | The UK FTSE 100 index opened 42 points or 0.8%, higher at 5,782. France's Cac added 1.3% and Germany's Dax rose 1.2%. |
| Japan's Nikkei 225 earlier closed up 2%, and Hong Kong's Hang Seng added 8%. | Japan's Nikkei 225 earlier closed up 2%, and Hong Kong's Hang Seng added 8%. |
| Despite the recoveries, which were sparked by the Fed cutting US rates to 3.5% from 4.25%, analysts predict more share volatility in coming weeks. | Despite the recoveries, which were sparked by the Fed cutting US rates to 3.5% from 4.25%, analysts predict more share volatility in coming weeks. |
| "Caution still rules the long-term picture," said Markus Steinbeis of Pioneer Investments. | "Caution still rules the long-term picture," said Markus Steinbeis of Pioneer Investments. |
| Recession fears | Recession fears |
| While global investors appear to have welcomed the Fed's dramatic move, some investors cautioned that it seemed like a panic decision. | While global investors appear to have welcomed the Fed's dramatic move, some investors cautioned that it seemed like a panic decision. |
| We consider the Fed's rate cut still insufficient for the global financial markets to completely recover and help the Japanese stocks to fully rebound Shinichi Ichikawa, Credit Suisse | We consider the Fed's rate cut still insufficient for the global financial markets to completely recover and help the Japanese stocks to fully rebound Shinichi Ichikawa, Credit Suisse |
| They also question whether it will be enough to avoid the US falling into a recession in the face of a sharp downturn in the American housing market, and signs of growing US unemployment and weakening consumer spending. | They also question whether it will be enough to avoid the US falling into a recession in the face of a sharp downturn in the American housing market, and signs of growing US unemployment and weakening consumer spending. |
| "The Fed's action provided a very positive surprise," said Tsuyoshi Segawa, strategist at Shinko Securities in Tokyo. | "The Fed's action provided a very positive surprise," said Tsuyoshi Segawa, strategist at Shinko Securities in Tokyo. |
| "But people are also starting to think that things may be so bad they needed to act." | "But people are also starting to think that things may be so bad they needed to act." |
| HAVE YOUR SAY The US Fed cannot stop a massive recession there. The rest of the world will follow. Tom PottsSend us your comments | |
| Credit Suisse's chief strategist Shinichi Ichikawa added: "We consider the Fed's rate cut still insufficient for the global financial markets to completely recover and help the Japanese stocks to fully rebound." | Credit Suisse's chief strategist Shinichi Ichikawa added: "We consider the Fed's rate cut still insufficient for the global financial markets to completely recover and help the Japanese stocks to fully rebound." |
| In the US, the Dow Jones closed Tuesday 1.1% lower. Far bigger declines had been expected because US markets were closed for a public holiday on Monday, and had avoided the hefty falls that battered global shares. | In the US, the Dow Jones closed Tuesday 1.1% lower. Far bigger declines had been expected because US markets were closed for a public holiday on Monday, and had avoided the hefty falls that battered global shares. |
| The UK's FTSE 100 index closed Tuesday 2.9% higher, having fallen more than 4% in early trading. | The UK's FTSE 100 index closed Tuesday 2.9% higher, having fallen more than 4% in early trading. |
| France's Cac 40 closed 2.1% higher, while Germany's Dax index closed 0.3% lower, having earlier been down by about 2%. | France's Cac 40 closed 2.1% higher, while Germany's Dax index closed 0.3% lower, having earlier been down by about 2%. |