Asian markets rebound after global rate cuts


South Korea, Hong Kong and Taiwan lowered their interest rates, joining a series of cuts Wednesday in the U.S., Europe and China aimed at stabilizing global markets that have plunged sharply this week.

Japan's benchmark Nikkei 225 index was up 2.1 percent to 9,397, a day after it plummeted 9.4 percent in its biggest one-day drop since the 1987 market crash.

Hong Kong's Hang Seng Index jumped nearly 3 percent to 15,871 after the territory cut interest rates for a second day. And a surprise rate cut in South Korea also cheered investors, who lifted the Kospi index 1.8 percent.

Mainland China's main index was up 0.6 percent after its central bank lowered rates Wednesday evening.

China's move came as six other central banks, including the U.S. Federal Reserve and European Central Bank, joined to lower rates to contain the spreading financial crisis. Japan's central bank, constrained by already-low rates, said it backed the moves.

"Investors bought back shares as sentiment slightly improved on measures including coordinated rate cuts," said Kazuhiro Takahashi, general manager at Daiwa Securities SMBC Co. Ltd. in Tokyo.

Investor reaction in Asia to the string of moves was more positive than in the U.S. and Europe, where an initial perk in markets soon dissipated amid severe stresses in lending markets and worries about a global recession.

On Wall Street, the Dow Jones industrial average ended a volatile session down 2 percent -- disappointing, but a milder decline than in previous days. U.S. stock index futures were up less than a percent, suggesting trading would open higher in New York.

European markets fell sharply Wednesday, with Britain's FTSE 100 sliding more than 5 percent.

Wavering investors in the U.S. were gripped by anxiety again after comments Wednesday afternoon by U.S. Treasury Secretary Henry Paulson that it would be several weeks before the government's $700 billion financial rescue package makes its first purchases of banks' troubled mortgage-backed assets.

Joining the worldwide efforts to ease the crisis, Taiwan's Central Bank reduced its key interest rate for the second time in two weeks.

"Our economy has come under pressure for a slowdown," Governor Perng Fai-nan said. "We hope the rate cut can stimulate consumption to spur economic growth."

South Korea lowered its key rate by a quarter point to 5 percent, lifting the benchmark Korea Composite Stock Price Index 2.5 percent to 1,319.25 at midday after sinking 5.8 percent Wednesday.

In Indonesia, trading on the Jakarta Stock Exchange was canceled Thursday after the benchmark JSX index sank 10.4 percent Wednesday before trading was suspended by late morning. Authorities ordered the market to stay closed, possibly through Friday, following a late night Cabinet meeting.

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