Rate-cut hopes lift global shares

Asian and European shares extend rally as investors worldwide await Federal Reserve policy decision.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By CNNMoney.com staff

Should banks be required to make more loans with money from the $700 billion bailout?
  • Yes
  • No

LONDON (CNNMoney.com) -- Stocks in Europe and Asia extended a global rally Wednesday as rate-cut hopes bolstered investors.

In the U.S., futures declined a day after the Dow Jones industrial average posted its second largest single-day point gain ever.

Futures give an indication of how markets may open when trading begins in New York.

Most European markets rose. By midday, Britain's FTSE 100 was up 4.9% and the CAC-40 in France was 6.5% higher. But Germany's DAX was down 1.3%.

Stocks in Asia mostly advanced. Tokyo's Nikkei index soared 7.7% while Hong Kong's Hang Seng index gained 1.6%. In Seoul, however, the KOSPI slipped 3%, giving up earlier gains

Investors are betting that central banks worldwide will further slash interest rates to boost the sagging global economy.

The Federal Reserve is widely expected to cut rates to 1% at the conclusion of its two-day meeting Wednesday. The policy decision is due at 2:15 p.m. ET.

The Bank of Japan is due to announce a rate decision Friday. The European Central Bank and Bank of England are both scheduled to deliberate interest rates next week.

Rate-cut optimism helped the blue-chip Dow surge 889 points, or 10.9%, on Tuesday. It was the Dow's second-biggest one-day point gain, following a 936-point rally two weeks ago. The percentage gain was the sixth-biggest for the index.

The Standard & Poor's 500 index gained 10.8% and the Nasdaq composite added 9.5%.

Matt King, chief investment officer at Bell Investment, said the rally may signal the end of the protracted market downturn.

"I'm not 100% sure if we're going to take off from here - I think that might be a little bit too optimistic - but I do think we've seen the worst of this," King told CNN Radio.

Despite Tuesday's big rally, October is still shaping up to be one of the worst months on Wall Street ever.

CNN Wires contributed to this report. To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Royal wedding: How much will it cost? Meghan Markle's wedding to Prince Harry could cost millions once security is included in the bill. See how the costs break down. More