Asian, European Shares Ride High on Fed's Rate Cut; Tokyo and London Log Biggest Rallies in Years; A Short-Term Solution?
European and Asian stocks roared ahead -- with Europe's gains the strongest in four years -- in a day-after response to the aggressive Federal Reserve interest-rate cut.</br></br>Among the biggest rallies, Tokyo stocks wiped out Tuesday's plunge by jumping 3.7%, the best advance in five years, and London was up 2.8% to mark its best two-day run since March 2003.</br></br>Analysts warned that uncertainty remains after the recent bout of global financial turmoil, especially with major U.S. financial institutions set to continue reporting their results this week.</br></br>"Certainly these markets are not out of the woods yet," said Grant Williamson, an adviser at Hamilton Hindin Greene in New Zealand. "What we have seen is a very short-term solution and we will have to see if the U.S. economy improves."</br></br>In TOKYO, where many shares have been beaten down on fears about fallout from the U.S. subprime-mortgage problems, the benchmark Nikkei Stock Average of 225 companies rose 579.74 points to 16381.54. The Bank of Japan, as expected, held interest rates steady at the end of a policy meeting.