China cuts rate and the markets soar

Asian markets ended the week up, which seems odd considering the horror in Mumbai and the unrest in Thailand.

According to the Daily Yomiuri, "The market is reacting very calmly to the terrorist attack," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "Investors in Hong Kong are still fixated on China's huge reduction in interest rates. There's bargain-hunting across the board."

There is a lot of optimism tied to China's most recent interest rate cut. By lowering the rate 1.08 percent, China took the largest plunge since the 1997 Asian crisis.

Plus there's been a lot of unemployment unrest in China and a government that wants to remain governing will be swift in addressing economic matters.


sources:
http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS_ASOL-?SITE=YOMIURI&SECTION=HOSTED_ASIA&TEMPLATE=ap_business.html

http://www.nytimes.com/2008/11/26/business/worldbusiness/26chinasteel.html?th&emc=th

http://www.nytimes.com/2008/11/27/business/worldbusiness/27yuan.html

http://www.businessweek.com/globalbiz/content/nov2008/gb20081126_344722.htm?chan=top+news_top+news+index+-+temp_global+business