BEIJING - Asian stock markets went up Thursday after Britain s central bank tried to stop a budding financial crisis.
The Shanghai Composite Index SHCOMP rose 0.83 and the Nikkei 225 NIK, in Tokyo, gained 0.4%. The Hang Seng in Hong Kong HSI went up 1%.
The Kospi 180721, in Seoul, gained 1.3% and Sydney's S&P ASX 200 XJO, increased 1.8%. Wall Street's benchmark S&P 500 index soared 2% on Wednesday for its biggest gain in seven weeks after the Bank of England announced it would buy as many government bonds as necessary to restore order to financial markets, as well as in New Zealand NZ 50 GR, Singapore STI and Taiwan Y 9999, advanced.
It helped to calm investor fears that planned British tax cuts would push up already high inflation. The value of the British pound fell to its lowest level since the 1970s and bond prices plunged because of that.
The S&P 500 SPX rose to 3,719. The Bank of England said on 04 that it would buy bonds over the next two weeks to stop a slide in prices. The plans for 45 billion pounds $48 billion of tax cuts with no spending reductions rattled investors.
The central bank warned that a risk to U.K. financial stability was posed by crumbling confidence in the economy. The International Monetary Fund took the rare step of urging a member of the Group of Seven advanced economies to abandon its plan for tax cuts and more borrowing.
The Dow Jones Industrial Average DJIA rallied 1.9% to 29,683. The Nasdaq Composite COMP went up 2.1% to 11,051. Despite Wednesday's gain, the S&P 500 is down more than 20% from its Jan. 3 record, which puts it in what traders call a bear market.
There are worries about a possible recession, higher interest rates and even higher inflation that could cause more turbulence ahead, according to forecasters.
The yield on the 10 year U.S. Treasury, or the difference between its market price and the payout if it is held to maturity, briefly exceeded 4% on Wednesday, its highest level in a decade.
The Federal Reserve and central banks in Europe and Asia have hiked interest rate hikes this year to cool inflation, which could lead to a recession in the world's economy.
If the Fed follows through on expectations, the chance of a U.S. recession will be at 25% this year and at 65% next year, according to the investment giant Vanguard.
In electronic trading on the New York Mercantile Exchange, benchmark U.S. crude CLX 22 lost 32 cents to $81.83 per barrel. The contract went up to $82.15. It went up $3.65 on Wednesday. Brent crude oil BRNX 22, the price basis for international oils, dropped 30 cents to $87.75 per barrel in London. It had gained $3.05 the previous session to $89.32.
The dollar was up from Wednesday's 143.96 yen to 144.32 yen.