European and Asian Markets Rally on News of U.S. Rate Cut
European financial markets stabilized yesterday after the U.S. interest-rate cut, as political leaders sought to calm sell-off fears by assuring Europeans that economic problems were in the United States, not their countries.</br></br>Major Latin American stock exchanges also rose after steep declines Monday, boosted by news of the Federal Reserve's three-quarter-point interest rate cut.</br></br>Asian markets rebounded Wednesday. Japan's Nikkei 225 was up 3.5 percent at the close of morning trading, and Australia's benchmark index was up about 5.1 percent at midday. Hong Kong's Hang Seng surged almost 7.5 percent in early trading and was up about 5.8 percent later in the morning, while China's stocks rose for the first time in three days.</br></br>Those gains came a day after stocks across Asia took precipitous falls for the second day in a row. The drops yesterday were even more severe than Monday's, and several markets hit multiyear lows. The Australian market suffered its worst one-day fall ever. Japan's Nikkei 225 fell to its lowest level since 2005.</br></br>Also yesterday, Indian shares plunged so quickly -- nearly 11 percent -- that its stock markets halted trading within a minute of opening and did not resume for an hour. The Bombay Stock Exchange Sensitive Index closed down 4.97 percent, its seventh successive drop. In South Korea, volatile futures prices prompted the main Kospi market to briefly suspend program-selling orders at midday.