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Asian markets rally on New York performance

New York reopened for business on Monday

(Keystone)

Financial markets across Asia rallied on Tuesday amid relief that the New York Stock Exchange lost less than expected when it reopened for business on Monday. Tokyo's Nikkei index closed up around two per cent, while shares in Hong Kong were up 2.5 per cent and those in Seoul ended the session 3.5 per cent higher.

Although the Dow Jones Industrial average plunged 7.1 per cent in its biggest-ever point loss, there was a sense in Asia that the damage in New York had been contained and that the session had at least gone ahead without major glitches. The Dow ended the day at 8,921, a fall of 684 points. The Nasdaq composite index fell 6.8 per cent.

On Monday, Tokyo's Nikkei had fallen five per cent as markets worldwide braced themselves for New York to resume business after last week's suicide attacks in New York and Washington which left thousands feared dead.

The markets' attention has now turned to Europe which made surprising gains on Monday. London's FTSE 100 index was up three per cent to 4,898 and in Frankfurt, the DAX closed up 2.88 per cent to 4,234. The Swiss Market Index ended up 3.1 per cent at 5,803.

Analysts are warning though that market volatility is far from over and that further swings could be seen in the coming days and weeks. They pointed out that Asian markets on Tuesday actually gave up many of their gains as the session progressed. The Nikkei at one point had been up 4.6 per cent.

Airline and insurance stocks have been hit particularly hard.

Central banks and governments have promised concerted action to help stabilise the markets. The US Federal Reserve and the European Central Bank each cut interest rates by half a per cent on Monday. That move was quickly followed by the Swiss National Bank, and by the central banks of Canada and Sweden.

The Bank of Japan followed suit on Tuesday by cutting its interest rate to just 0.1 per cent from 0.25 per cent.

The NYSE's closure, which lasted nearly a week, was the longest shutdown since the 1929 stock market crash.

swissinfo with agencies


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