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Global stock markets rally on positive US economic outlook

Global stock markets rally on positive US economic outlook
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First Published: Thu, Mar 22 2007. 09 51 AM IST
Updated: Thu, Mar 22 2007. 09 51 AM IST
Tokyo/ Hong Kong/New York/London: The Nikkei average rose to its highest in three weeks on 22 March with a wide range of blue-chip shares such as Sony Corp. rising on growing optimism about the US economic outlook following gains on Wall Street.
The Nikkei was up 1.70% or 292.27 points at 17,455.47 by the end of the morning session, its highest since 1 March. The broad TOPIX index added 1.64% to 1,736.32.
Hong Kong stocks rose 1.2% on 22 March, tracking a rally on Wall Street, as the US Federal Reserve’s softening bias toward higher interest rates helped push up rate-sensitive property stocks.
HSBC Holdings leapt 1.8% at the open amid tentative signs of progress in the subprime mortgage crisis.
The benchmark Hang Seng Index opened at 19,757.73.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, had gained 1.6% by 0203 GMT.
The Hang Seng properties sub-index rose 1.6%.
Meanwhile, US stocks rallied sharply on 21 March after investors viewed a statement from the Federal Reserve as signaling the central bank’s next move may be a cut in interest rates.
Shares of Morgan Stanley were already trading higher earlier in the session after reporting record earnings, but the investment bank’s stock piled on more gains following the Fed decision and the accompanying statement.
Other rate-sensitive financial shares jumped, including Citigroup Inc. and Bank of America Corp.
The Fed said it remained concerned about inflation but left out a reference to further “firming” of monetary policy that was contained in its previous statement.
The Dow Jones industrial average ended up 159.42 points, or 1.30%, at 12,447.52. The Standard & Poor’s 500 Index was up 24.10 points, or 1.71%, at 1,435.04. The Nasdaq Composite Index was up 47.71 points, or 1.98%, at 2,455.92.
The Fed voted unanimously to keep its benchmark federal funds rate at 5.25% while maintaining a warning on the risk of inflation.
Britain’s FTSE 100 index rose to its highest close in three weeks on 21 March after finance minister Gordon Brown said income and corporate tax would be cut next year, while Hammerson shone on bid speculation.
Brown’s announcement helped the UK benchmark index to end 36.5 points, or 0.59%, higher at 6,256.8, outpacing other major European markets.
Merger and acquisition talk also helped underpin the UK benchmark index, with Hammerson, a real estate group, topping the gainers’ list. Hammerson, which has previously been linked with bid speculation, declined to comment.
Its shares gained 4.8%, while Europe’s largest listed real estate investment trust Land Securities climbed 2.7% and British Land was up 1.4%.
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First Published: Thu, Mar 22 2007. 09 51 AM IST
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