US Fed Cuts Rate to 3.5 Percent
The United States Federal Reserve has cut its benchmark rate to 3.5 Percent. The Bank's emergency rate cut by 0.75 percent is expected to cool the share market collapse and will the overcome the fear of economic recession. This is the first emergency rate reduction since the year 2001.A panic in the International market was felt after a biggest fall in world share market. Emerging Asian markets were affected badly.
Japanese Nikkei 225 closed down 5.7 percent; Hong Kong lost 8.7 per cent, while Indian stocks plunged very fast.
After US rate cut, Asian stocks jumped. MSCI Index added 1.9 percent. Japanese Nikkei added 0.6 percent and Hang Seng Index increased by 4.2 percent.
The rate cut is welcomed globally as a measure towards weak economic outlook and increasing downside risks of growth.
