Asian stocks extend early gains
Thursday, 9 August 2007
HONG KONG, Aug 8 (Reuters): Asian stocks extended early gains on Wednesday and the dollar climbed against the yen as worries about a credit squeeze eased after the US Federal Reserve gave a positive outlook for the world's biggest economy.
Corporate takeover talk helped spur the Australian market, as the S&P/ASX 200 index rose 1.9 per cent.
The Fed, which left its key interest rate unchanged at 5.25 per cent in a widely expected move, said while tightening credit conditions were a risk to the US economy, inflation was still its main worry.
Those comments knocked back expectations of a cut in US interest rates, helping shore up the dollar, while an interest-rate hike in Australia gave the Aussie dollar a boost.
"It looks like the Fed delivered the best possible statement to relieve the market. While touching on the credit issue, it maintained a positive economic outlook," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in Korea.
MSCI's measure of Asia Pacific stocks excluding Japan put on 2.3 per cent by 0618 GMT, rising for a second session from a one-month low plumbed on Monday. It was now down about 7 per cent from a record high set on July 24.
Corporate takeover talk helped spur the Australian market, as the S&P/ASX 200 index rose 1.9 per cent.
The Fed, which left its key interest rate unchanged at 5.25 per cent in a widely expected move, said while tightening credit conditions were a risk to the US economy, inflation was still its main worry.
Those comments knocked back expectations of a cut in US interest rates, helping shore up the dollar, while an interest-rate hike in Australia gave the Aussie dollar a boost.
"It looks like the Fed delivered the best possible statement to relieve the market. While touching on the credit issue, it maintained a positive economic outlook," said Kim Joong-hyun, an analyst at Goodmorning Shinhan Securities in Korea.
MSCI's measure of Asia Pacific stocks excluding Japan put on 2.3 per cent by 0618 GMT, rising for a second session from a one-month low plumbed on Monday. It was now down about 7 per cent from a record high set on July 24.