Make us your home page

World markets buoyed by China rate cut, Fed stimulus talks

A currency trader watches his monitors at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, on Thursday. South Korea’s Kospi rose 2.6 percent, or 46.10 points.

Associated Press

A currency trader watches his monitors at the foreign exchange dealing room of the Korea Exchange Bank headquarters in Seoul, South Korea, on Thursday. South Korea’s Kospi rose 2.6 percent, or 46.10 points.

LONDON — Global markets rose Thursday, boosted by China's decision to cut interest rates, hopes that the Federal Reserve will consider new support for the U.S. economy and speculation that Europe is preparing to give Spain financial aid.

China cut its benchmark lending rate by a quarter percentage point to 6.31 percent for the first time since 2008 to support growth in its cooling economy, the world's second-largest.

The move is the strongest sign yet that authorities in Beijing are determined to avoid a sharp slowdown. Chinese economic growth has been one of the pillars of the global economy in recent years, so the move boosted sentiment in financial markets worldwide.

Germany's DAX closed 0.8 percent higher at 6,144.22 while France's CAC-40 rose 0.4 percent to 3,071.16. Britain's FTSE 100 gained 1.2 percent to 5,447.79. Madrid's Ibex was up 0.3 percent while its 10-year bond yield slumped to 6.04 percent from 6.30 percent before the bond auction results.

Further boosting markets, Fed Chairman Ben Bernanke said the central bank is prepared to take further steps to support the U.S. economy if it weakens. A day earlier, three Fed officials suggested that the central bank may need to do more to help the economy.

Although most analysts do not expect the Fed to offer new stimulus measures at its next policy meeting June 19 to 20, Bernanke's comments reassured investors worried about a slowdown in the world's largest economy.

In Europe, which has been a key source of turmoil for financial markets in recent weeks, the mood was lightened by reports that Spain may get financial aid.

Spain's government cannot afford to rescue its banking sector but is reluctant to accept a full-fledged bailout from its eurozone partners as that would mean giving up control over some of its domestic policies.

Investors hope that European officials will agree to a compromise solution — giving Madrid the money but reassuring it that it will not have to take harsh new austerity measures.

"There is speculation that EU officials are coordinating some form of support for Spain, especially for its banking sector, but details of what this will entail is lacking," said Mitul Kotecha, an analyst at Crédit Agricole CIB.

In the meantime, the hopes for a rescue boosted Spain's bond markets, helping it raise money in a debt auction. Although its borrowing rate for 10-year bonds was higher than earlier auctions, it was lower than the rate international investors were demanding in the secondary bond market — where issued bonds are traded freely.

Earlier in Asia, stock indexes had closed higher. Japan's Nikkei 225 index added 1.2 percent to 8,639.72, Hong Kong's Hang Seng gained 0.9 percent to 18,678.29 and South Korea's Kospi index jumped 2.6 percent to 1,847.95.

Australia's S&P/ASX 200 climbed 1.3 percent to 4,108.60. Benchmarks in New Zealand, Taiwan and Indonesia also rose, but those in mainland China and Singapore fell.



Nikkei 225

1.2 percent

Hong Kong

Hang Seng

0.9 percent

S. Korea


2.6 percent



0.8 percent



0.4 percent


FTSE 100

1.2 percent



0.3 percent


FTSE 100

1.2 percent

World markets buoyed by China rate cut, Fed stimulus talks 06/07/12 [Last modified: Thursday, June 7, 2012 9:09pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.

Join the discussion: Click to view comments, add yours

  1. Apple Scales Back Its Ambitions for a Self-Driving Car


    SAN FRANCISCO — As new employees were brought into Apple's secret effort to create a self-driving car a few years ago, managers told them that they were working on the company's next big thing: A product that would take on Detroit and disrupt the automobile industry.

     In this Monday, April 10, 2017 file photo, Luminar CEO Austin Russell monitors a 3D lidar map on a demonstration drive in San Francisco. Russell, now 22, was barely old enough to drive when he set out to create a safer navigation system for robot-controlled cars. His ambitions are about to be tested five years after he co-founded Luminar Technologies, a Silicon Valley startup trying to steer the rapidly expanding self-driving car industry in a new direction. Apple says it will scale back its amitions to build a self-driving car.  [AP Photo/Ben Margot]
  2. Groundbreaking today for complex on old Tampa Tribune site

    Real Estate

    TAMPA — A groundbreaking is slated for 10 a.m. today for a 400-unit apartment complex planned on the site of the former Tampa Tribune building in downtown Tampa.

    Renderings for a high-end apartment complex that will be built on the Tampa Tribune site in downtown Tampa. 
[Courtesy of Related Group]
  3. Walmart announces delivery partnership with Google


    Walmart announced a new delivery partnership with Google to make online shopping easier for customers.

    People walk in and out of a Walmart store in Dallas. Walmart announced a new delivery partnership with Google.  [Associated Press]
  4. Insurance regulators fret over a spike in auto glass claims


    TALLAHASSEE — Three months ago, state regulators weren't tracking a surge in broken auto glass claims, particularly in Tampa Bay.

    The issue has their attention now.

    The Office of Insurance Regulation is taking on assignment of benefits abuse in the 2018 legislative session. Pictured is Florida Insurance Commissioner David Altmaier. | [Times file photo]
  5. Proino Breakfast Club owner charged with not paying state taxes


    LARGO — Just before noon on a recent Sunday at Proino Breakfast Club, the dining room was bustling as owner George Soulellis chatted with a customer.

    Proino Breakfast Club at 201 West Bay Drive in Largo. The owner was arrested last month on a theft of state funds charge, according to court records. JIM DAMASKE   |   Times