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Indian stocks zooms, Asian mkt surge on Japan,US rate cut

by Sanjay Jha | October 30, 2008 at 11:17 pm

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Asian stock markets surged for a third straight day, as major economies slashed interest rates. China's central bank began to cut its lending and deposit rate by 0.27 of a percentage point for commercial banks on Thursday.

Indian Equities soared higher on Friday, in a catch-up game with rallying global markets, after remaining shut previous day on account of festive holiday. Sentiment in the global market was positive after governments across the globe were cutting rates to tackle financial crisis. Bank of Japan cut interest rates to 0.3 per cent from 0.5 per cent. Earlier, US government cut interest rate by 0.5 per cent despite its third quarter GDP came in at a negative 0.3 per cent.

The benchmark Sensex on Thursday surged by a whopping 815 points at 1130 hrs on the back of firm Wall Street cues, declining inflation and good buying on the first day of new derivatives contract.

The Bombay Stock Exchange 30-share bellwether index resumed with an upside gap of over 300 points and rallied further to quote at 9,859.25 at 1130 hrs, a smart rise of 814.74 points over previous close.

Similarly, the S&P CNX Nifty of the National Stock Exchange also spurted by 224.30 points to 2,921.35 at 1130 hrs from last close.

Fall in inflation to 10.68 per cent for the week ended October 18, from 11.07 per cent in the previous week, showing a decline for the fifth successive week mainly boosted the market sentiment, brokers said.

US Federal Reverse's aggressive decision to cut key interest rates by 50 basis points to support the worldwide economic downturn also partly aided the uptrend.