WSJ: Korea’s Kospi Composite added 12% — its biggest percentage gain in history — after news of a currency swap line agreement with the Federal Reserve for access to U.S. dollar liquidity of up to $30 billion. Taiwan stocks gained 6.3% after a surprise interest-rate cut from the central bank.
Japan’s Nikkei added 10% as a weaker yen spurred gains in exporter shares and on hopes the country’s central bank may make a rate cut of its own Friday for the first time since 2001. Hong Kong’s Hang Seng Index surged 12.8% after authorities there matched the Fed’s half percentage-point easing due to the local currency’s peg to the U.S. dollar.
Singapore’s Straits Times Index was up 8.5% after news of its own Fed currency-swap arrangement, though the Monetary Authority of Singapore said it didn’t need to act on it as banking system liquidity was ample.
“Investors needed reassurance that the Fed would not be constrained by symbolic levels and act as necessary to contain the recession, and the market’s response suggested the Fed succeeded in communicating this option,” said analysts at UBS.
U.S. stock futures were encouraging with Nasdaq 100 futures and S&P 500 futures quoted up 3.4% and DJIA futures adding 292 points; Nymex crude oil was nearly $3 higher while Asian currencies like the Korean won jumped against the U.S. dollar, as did the euro.