Asian stocks have risen sharply after a dramatic interest rate cut by the US Federal Reserve helped calm anxiety.
Asian stock markets have risen after a dramatic interest rate cut by the US Federal Reserve helped calm anxiety.
Australia, South Korea and Hong Kong saw share prices rebound, reversing days of losses and easing fears of a global recession.
Japan's Nikkei 225 index closed 2.0% higher as gains were limited by concern about the effects that the rate cut were having on currencies.
Japan's benchmark Nikkei 225 index climbed 3%, having plunged nearly 6% on Tuesday in its worst fall since 9/11.
Australia, South Korea and Hong Kong saw share prices rebound, following days of heavy losses.
Australian stocks followed their worst day of trading in 25 years by bouncing back more than 4%.
Australian shares finally managed to end their 12-day losing streak, closing up by 4.4%.
In another move, President Bush and congressional leaders agreed to act quickly to implement a $145bn (£74bn) rescue package for the US economy.
'Stabilising'
Markets bounce back
In Hong Kong, the Hang Seng Index traded more than 5% higher, rebounding from Tuesday's drop of nearly 9%, while South Korean shares were up about 1%.
In Hong Kong, the Hang Seng Index rose almost 5%, rebounding from Tuesday's drop of nearly 9%.
Stocks in South Korea were up more than 2%, while Shanghai's Composite Index rose almost 3% in early trade, after a 7% fall on Tuesday.
Global shares had rebounded after the Fed cut its main interest rate to 3.5% from 4.25% on Tuesday in an attempt to pull the world's biggest economy away from a recession.
Japanese Finance Minister Fukushiro Nukaga welcomed the move, saying he hoped it would have a positive effect on Japan's markets.
I expect the move will stabilize the global economy as a whole Fukushiro Nukaga Japanese Finance Minister Bear market may be looming
I expect the move will stabilize the global economy as a whole Fukushiro Nukaga Japanese Finance Minister Bear market may be looming
Global shares rebounded after the US central bank cut its main interest rate to 3.5% from 4.25% on Tuesday in an attempt to pull the world's biggest economy away from a recession.
Japanese Finance Minister Fukushiro Nukaga welcomed the move, saying he hoped it would have a positive effect on Japan's markets.
"I expect the move will stabilize US financial markets and the global economy as a whole," he said.
"I expect the move will stabilize US financial markets and the global economy as a whole," he said.
On Tuesday, the UK's FTSE 100 index closed 2.9% higher after falling more than 4% earlier on the back of the US rates cut. France's Cac also bounced back but Germany's Dax closed 0.3% down.
'Caution rules'
In the US, the Dow Jones and S&P 500 indexes fell, but their declines were less sharp than they had been earlier.
On Tuesday, the UK's FTSE 100 index closed 2.9% higher having fallen more than 4% in early trading.
Gaining ground
France's Cac 40 closed 2.1% higher while Germany's Dax index closed 0.3% down having earlier been down by about 2.0%.
The rally came after global markets suffered serious losses on Monday, and as investors continued to dump shares in early trading on Tuesday.
In the US, the Dow Jones closed 1.1% lower, but far bigger declines had been expected because US markets had avoided the hefty falls on Monday due to a public holiday.
The fears about slowing global growth were so pronounced that they spread to other asset classes, hurting commodities such as oil and gold.
One analyst said that while the rate cut might help to ease concerns in the short-term, stock markets were set to be volatile in coming weeks.
But most stock market indexes and commodities quickly gained ground after their earlier losses in response to the Fed's biggest interest rate cut in more than two decades.
The UK's benchmark FTSE 100 index of largest shares finished 162 points, or 2.9%, ahead at 5,740.1 and the French Cac 40 index gained 2%, but Germany's Dax failed to make headway, still down 0.3% at 6,769.47.
In the US, shares on the Dow Jones Industrial Average ended the session 1% lower at 11,971.19, while the broader S&P 500 index also shed 1%.
Caution rules
The recent stock market declines came after many investors were disappointed by US President George W Bush's proposed emergency stimulus plan to boost the economy.
At the same time, banks were reporting increasing losses stemming from problems in the US housing market, and some of the main bellwether companies were not meeting analysts' earnings estimates.
Signs of the tougher economic environment have also been evident in the Christmas corporate trading statements and economic data on both sides of the Atlantic.
Many analysts said that while the Fed's rate cut might help to ease concerns in the short-term, stock markets were set to be volatile in coming weeks.
"Caution still rules the long-term picture," said Markus Steinbeis of Pioneer Investments.
"Caution still rules the long-term picture," said Markus Steinbeis of Pioneer Investments.
