Asian stocks stage strong early rally
Asian stocks rallied strongly in early trade today, swinging back into positive territory after gains on Wall Street and in Europe overnight.business Updated: Aug 10, 2011 07:44 IST
Asian stocks rallied strongly in early trade on Wednesday, swinging back into positive territory after gains on Wall Street and in Europe overnight.
Global stocks began the week with huge losses in the wake of Standard and Poor's unprecedented US credit downgrade, which triggered a wild ride for investors worldwide.
But markets had a better day yesterday, with the Dow Jones Industrial Average gaining 430 points, or 3.98%, to close at 11,239.77 while European shares also bounced back after falling as much as six%.
The rebound came despite disappointment over the lack of any announcement on further quantitative easing by the US Federal Reserve.
Instead, the Fed's policy-setting Federal Open Market Committee said that it expected to maintain interest rates near zero for "at least" the next two years due to economic weakness.
Asian markets took up the baton after Wall Street's rise, with share prices up sharply in Japan.
The benchmark Nikkei-225 index of the Tokyo Stock Exchange was up 154.18 points or 1.72% at 9,098.66 after the first 20 minutes of trading.
"Market sentiment hasn't stabilised yet, so while we'll likely see a relief rally today, it'll be a rocky path to recovery," Toshiyuki Kanayama, market analyst at Monex, said.
South Korean shares also gained, opening 4.22% higher on Wednesday after the US Federal Reserve pledged to keep interest rates low.
The decision to ban the short-selling of all listed stocks for three months effective from early on Wednesday, also helped to cool the selling frenzy.