World stock markets rose sharply today after the US Federal Reserve slashed a key US bank lending rate on Friday. The move, accompanied by a signal that the Fed was prepared to take further action, appeared to calm stock markets rattled by the prospects of a credit squeeze.
US markets opened slightly higher this afternoon after Friday's strong gains. Most European markets including Dublin's ISEQ were around 1% ahead.
Earlier, Tokyo's Nikkei index closed up 3% at 15,732, its biggest daily percentage rise since March 2002, and recovering from its biggest one-day fall in nearly six years on Friday.
To help counter the credit market turmoil, the US central bank cut its discount rate by a half-percentage point to 5.75% on Friday in a surprise move.
The Fed also said 'downside risks to growth have increased appreciably', dropping its views about inflation being a major concern and signalling a willingness to take more dramatic action to cushion the economy from tightening credit.
