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| US rescue plan sparks Asian rally | US rescue plan sparks Asian rally |
| (about 2 hours later) | |
| Asian share indexes bounced back on Thursday, boosted by an earlier rally on Wall Street. | |
| Shares in Hong Kong and Japan rose by 1% after the US publicised plans to stabilise its financial systems. | |
| US stock indexes had recovered after Tuesday's surprise decision by the Federal Reserve to cut interest rates. | US stock indexes had recovered after Tuesday's surprise decision by the Federal Reserve to cut interest rates. |
| European shares fell on Wednesday reflecting concerns the European Central Bank would not make similar cuts. | European shares fell on Wednesday reflecting concerns the European Central Bank would not make similar cuts. |
| On Thursday, Japan's benchmark Nikkei index was up more than 2% in early trading, although the gains later slipped back to 1.4%. | |
| Both it and Hong Kong's Hang Seng were bolstered by optimism that a rescue plan for American bond insurers may be in the offing. | |
| Strengthening bonds | |
| The plan would bail out bond insurers, which lie at the heart of the financial system, guaranteeing about $2 trillion of assets. | The plan would bail out bond insurers, which lie at the heart of the financial system, guaranteeing about $2 trillion of assets. |
| All three US stock market indexes erased deep losses on Wednesday to end strongly ahead. The Dow Jones rose 2.5% at 12,270.17, while the Nasdaq turned around a 4% decline. | All three US stock market indexes erased deep losses on Wednesday to end strongly ahead. The Dow Jones rose 2.5% at 12,270.17, while the Nasdaq turned around a 4% decline. |
| Panic had swept through stock markets worldwide earlier this week on fears that key global economies will enter recession. | Panic had swept through stock markets worldwide earlier this week on fears that key global economies will enter recession. |
| On Tuesday, the US Federal Reserve made its biggest rate cut for 25 years to stoke up growth and bolster markets. | On Tuesday, the US Federal Reserve made its biggest rate cut for 25 years to stoke up growth and bolster markets. |
| However, worries persisted that the move may have come too late, as many firms have already reported lower profits and a worsening business environment. | However, worries persisted that the move may have come too late, as many firms have already reported lower profits and a worsening business environment. |
| Fragile markets | Fragile markets |
| News of the US government plan to inject capital into bond insurers gave fragile confidence in the financial sector a boost and sent shares in banks, including Citigroup and JP Morgan surging, while technology firms also gained. | News of the US government plan to inject capital into bond insurers gave fragile confidence in the financial sector a boost and sent shares in banks, including Citigroup and JP Morgan surging, while technology firms also gained. |
| You do have to rescue markets otherwise you would go into a depression, as you did in the 1930s George Soros Chill on Wall Street | You do have to rescue markets otherwise you would go into a depression, as you did in the 1930s George Soros Chill on Wall Street |
| The technology-heavy Nasdaq rose 1%, while the wider S&P 500 index also ended ahead, up 2.1%. | The technology-heavy Nasdaq rose 1%, while the wider S&P 500 index also ended ahead, up 2.1%. |
| On Tuesday, the European Central Bank hinted it would not follow the Fed by slashing rates, and analysts said the Bank of England was unlikely to accelerate rate cuts. | On Tuesday, the European Central Bank hinted it would not follow the Fed by slashing rates, and analysts said the Bank of England was unlikely to accelerate rate cuts. |
| Speaking to the BBC, billionaire investor George Soros said it was going to be difficult for the UK and US to avoid a recession, even after the Fed cut its main interest rate to 3.5% from 4.25%. | Speaking to the BBC, billionaire investor George Soros said it was going to be difficult for the UK and US to avoid a recession, even after the Fed cut its main interest rate to 3.5% from 4.25%. |
| Mr Soros said he supported the US Federal Reserve's surprise interest rate cut, which bolstered global stock indexes. | Mr Soros said he supported the US Federal Reserve's surprise interest rate cut, which bolstered global stock indexes. |
| "You do have to rescue markets otherwise you would go into a depression, as you did in the 1930s," he said. | "You do have to rescue markets otherwise you would go into a depression, as you did in the 1930s," he said. |
| Market movers | Market movers |
| The UK's FTSE 100 index finished a nerve-wracking session 131 points, or 2.2%, lower at 5,609.3, erasing the gains it made on Tuesday. | The UK's FTSE 100 index finished a nerve-wracking session 131 points, or 2.2%, lower at 5,609.3, erasing the gains it made on Tuesday. |
| Germany's Dax lost 4.9% at 6,439.21, while France's Cac 40 was down 4.3% at 4,636.76. | Germany's Dax lost 4.9% at 6,439.21, while France's Cac 40 was down 4.3% at 4,636.76. |
| So far this year, the FTSE 100 has lost more than 13% of its value, wiping about £225bn off the total value of the companies listed on the index. | So far this year, the FTSE 100 has lost more than 13% of its value, wiping about £225bn off the total value of the companies listed on the index. |
| Germany Dax's index has been one of the worst hit in Europe, down almost 20% this year. | Germany Dax's index has been one of the worst hit in Europe, down almost 20% this year. |