20-03-2008
Asian markets respond to US interest rate decision
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
Stock markets in Asia have responded positively to the US decision to reduce interest rates.
Following the announcement by the US Federal Reserve to reduce interest rates by 0.75 per cent, stock markets in Asia have reacted well, with indexes in South Korea and India increasing by two per cent.
Moreover, stocks in Australia increased by four per cent and Japan's Nikkei strengthened by 2.5 per cent.
The reduction by the US Federal Reserve brings interest rates down to 2.25 per cent and led to a rally in domestic markets, despite initial disappointment that the interest rate reduction had not been larger, reports the Financial Times.
In a statement, the US central bank noted that "outlook for economic growth has weakened further" and that "downside risks remain".
"Inflation has been elevated and some indicators of inflation expectations have risen. Uncertainty about the inflation outlook has increased," it added.