Hong Kong’s Hang Seng index saw its biggest one-day gain in a decade and its largest points gain in history on Wednesday when it added 2,332 points, or 10.72 percent, to 24,090.17 on the heels of Tuesday’s surprise interest rate cut from the US Federal Reserve. The big gains came after the index had dropped 14 percent in the past two sessions on worries that a US recession could hurt the global economy. Following on the Fed’s action, the Hong Kong Monetary Authority cut the main interest rate there from 5.75 percent to 5 percent.Most other Asia-Pacific equities markets followed the Hang Seng higher on the session even though there is still concern that the US economy will slow into recession. The exception in the gains was Taiwan’s Taiex index, which dropped 2.29 percent to 7,408.4, a decline of 173 points on the day. In South Korea, the Kospi index was 1.21 percent higher to 1,628.42. The Shanghai Composite was 3.14 percent higher to 4,703.05 while the FTSE Straits Times Index added 4.08 percent to 2,983.62 in Singapore. Australian markets ended 12 consecutive days of declines when the Sydney Ordinaries gained 4.28 percent to 5,445.6 and the S&P/ASX200 jumped 4.35 percent to 5,412.3. In India, the Sensex was 5.17 percent higher to 17,594.07.
In Tokyo, the Nikkei 225 was up 3.04 percent to 12,829.06 while the Topix index added 2.46 percent to 1,249.93 and the Mothers market gained 1.92 percent to 619.85. There had been bigger gains earlier in the session, but many investors were still worried that the US rate cuts were not sufficient to avoid recession. Shippers saw gains on the session as Nippon Yusen (TYO: 9101) was up 4 percent to ¥756 and Mitsui OSK Lines (TYO: 9104) was 5.7 percent higher to ¥1,138. Carmakers saw gains as Toyota (TYO: 7203.T; NYSE: TM; LSE: TYT) added 4.5 percent to ¥5,100 and Honda (TYO: 7267; NYSE: HMC) gained 3.26 percent to ¥3,010. The electronics sector was mixed. Nintendo (TYO: 7974; NAS: NTDOY; FWB: NTO) was up 6.3 percent to ¥54,200 but Sony (TYO: 6758; NYSE: SNE) dropped 2.7 percent to ¥4,970 after Goldman Sachs cut its recommendation on the consumer electronics manufacturer from “buy” to “neutral”.
While Asia-Pacific equities markets seemed to benefit from yesterday’s move by the Fed, European markets were lower again on the session. The FTSE Eurofirst 300 was 2.8 percent lower to 1,267.8. The CAC-40 fell 4.25 percent to 4,636.76 and Madrid’s IBEX was down 4.56 percent to 12,254.6 while the Dax dropped 4.88 percent to 6,439.21. There were few gainers on the session, but Air France (Euronext: AF; NYSE: AKH) led gainers on the CAC-40 with an advance of 1.33 percent to €19.10 while drug maker Schering (FWB: SCH) led the Dax as it added 0.34 percent to €103.76. The utilities sector declined on the session. EDF (Euronext: EEN) was down 5.03 percent to €64.58 while Suez (Euronext: SZE; NYSE: SZE) fell 5.26 percent to €38.04 and Eon (FWB: EOA; LSE: EON; NYSE: EON) dropped 6.78 percent to €119.83. The biggest decline on the CAC-40 for the day came in the oil sector, where Total (Euronext: FP; NYSE: TOT) was 5.82 percent lower to €46.78. Truck manufacturer Man (FWB: EDF1) had the worst day on the Dax as it dropped 7.24 percent to €77.81.
London’s markets also saw declines. The FTSE 100 was down 2.28 percent to 5,609.3 while the FTSE 250 was 1.24 percent lower to 9,493.7. Still, there were some fairly healthy gains for some individual companies. British Airways (LSE: BAY; NYSE: BAB) led gainers on the 100 as it added 4.31 percent to 308.75p, while in another travel-related sector cruise operator Carnival (LSE: CCL) was up 3.76 percent to £20.44. Among banks, Alliance and Leicester (LSE: AL) was 3.99 percent higher to 742p. The oil sector was mixed. Tullow Oil (LSE: TLW; OTC: TUWLY) gained 3.74 percent to 568p but Royal Dutch Shell’s (LSE: RDSA, RDSB; NYSE: RDS.A, RDS.B) B shares led the losers on the 100 with a decline of 5.85 percent to £16.90. Over on the 250 oil and gas producer Imperial Energy (LSE: IEC) fell 9.62 percent to £13.24. Electricity generator British Energy Group (LSE: BGY) dropped 5.34 percent to 479p.
Wall Street was lower in early afternoon trade as investor sentiment was not cheered by Tuesday’s surprise interest rate cut by the Fed and as results from several companies disappointed. The Dow Jones Industrial Average was down 1.44 percent to 11,798.86, up from earlier lows but still down almost 175 points from Tuesday’s close. Meanwhile, the Nasdaq Composite was 2.8 percent lower to 2,227.99 and the S&P 500 had dropped 1.74 percent to 1,287.76. While iPod maker Apple (NAS: AAPL; LSE: ACP; FWB: APC) said that sales in its fiscal second quarter would likely be up by 29 percent, that was less than predictions, sending shares in the computer and handset maker $28.80 lower to $126.84. Mobile phone manufacturer Motorola (NYSE: MOT) was down $2.35 to $9.97 when it said profits were down 84 percent in the fourth quarter and that it will likely see losses in the first quarter at around 5 cents to 7 cents per share. Elsewhere in the sector, New York-traded shares of Nokia (NYSE: NOK; OMX: NOK1V; FWB: NOA3) dropped $1.72 to $29.98.
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