Asian, European stocks rise on rate cut by Delia Cruceru

After the Federal Reserve decided Tuesday to cut its rate, the stocks extended their rally on Wall Street Wednesday as stock markets from Europe and Asia rise. The Federal Reserve has cut its benchmark interest rate by a half percentage point to 4.75 percent, a move to help the U.S. economy to stay away from recession as the mortgage markets are making troubles. "I think investors are in general thinking there's a better chance of the economy improving than there was a week ago," said J. Bryant Evans, a portfolio manager at Cozad Asset Management. "Down the road we might see this as helping the economy but it could also help inflationary pressures. That is the thing that the Fed is weighing: help the economy by reducing rates versus inflation." After Tuesday, the Dow Jones industrials rose 59.99, or 0.44 percent, to 13,799.38 after it climbed nearly 336 points. In Europe Britain's FTS 100 Index rose with 2.8 percent to 6,460.00, in Germany the DAX Index gained 2.3 percent to 7,750.84 and France's CAC-40 rise 3.3 percent to 5,730.82. In Asia, Japan's Nikkei 225 Index gained 579.74 points, or 3.7 percent while Hong Kong's Hang Seng index climbed 977.79 points, or 3.98 percent, to 25,554.64. In India Bombay's Sensex Stock Exchange soared 654 points, or 4.2 percent, to 16,323. The Bank of Japan decided not to raise its key interest rate, remaining unchanged at 0.5 percent, as a response to the Federal Reserve cut.

related story: http://news.yahoo.com/s/ap/20070919/ap_on_bi_ge/world_markets;_ylt=ApI0OqxMPmles0jnKT22AHys0NUE

by Delia Cruceru for PocketNews (http://pocketnews.tv)

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