Most Asian markets climbed after the US Federal Reserve slashed its main interest rate between zero and a quarter of one per cent in accordance with its plan to fight deflation and deepening recession. However, investors were pretty much concerned over the worsening economic situation at the global level. Following the Fed announcement, most of the Asian indices closed to the upside while
Indian share market failed to gain momentum on Fed’s move. Hong Kong stocks edged up 2.18 per cent higher on December 18 but mainline stock HSBC pulled the market index down on capital deterioration worries. China confirmed that it would be slashing the domestic petrol and diesel prices significantly as it moves towards regulated pricing regime. China said the move is in accordance with the constant decline in international crude oil prices.
Taking cues from the Wall Street, Japan shares ended higher on December 18 in wake of the possibility that Bank of Japan might announce rate cut. However, prevailing weakness in dollar dragged down export oriented stocks. There are widespread speculations that the Bank of Japan would trim its interest rate in line with the US Federal Reserve cutting its benchmark interest rate. The move by the Japan’s central bank is seen as a further step towards easing corporate credit flow in view of sharp rise in yen and sliding global demand as the major economies are already in recession. Among the top gainers on the Tokyo Stock Exchange’s benchmark Nikkei-225 index were Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group Inc. and Nomura Holdings Inc. Stocks that ended in the negative territory were Honda Motor Co, Toyota, Sony and electronics maker Panasonic Corp.
In
market news, on December 18, Seoul shares ended higher continuing its winning streak for a fourth successive session. However analysts are worried prevailing economic conditions might take a toll on several blue chip stocks. In Indian share market news, steep fall in inflation, which slid to a 9-month low of 6.84 per cent for the week ended December 6, led the benchmark Sensex on the Bombay Stock Exchange cross the physiologically important 10,000 mark on December 18. The sharp fall in inflation figures was primarily due to receding international oil and gas prices and analysts further expect further fall in inflation. The rally in markets was led by rat sensitive sectors such realty, auto and banking sectors as more than expected fall in inflation figures raised hopes for another round of interest rate cut. During the corresponding week last year, inflation rate was at 3.84 per cent. The
BSE Sensex has gained over 30 per cent from the October lows. Over the past few weeks the central government and the RBI have taken a series of concrete measures to boost the flagging economy. While the market is still far away from any bull rally, there is expectation among traders that the economy will tread on the steady path in the coming months. Some of the biggest gainers on Sensex were Reliance Infrastructure, ICICI Bank, State Bank of India, DLF and Jaiprakash Associates.
